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/raid1/www/Hosts/bankrupt/TCR_Public/060327.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 27, 2006, Vol. 10, No. 73 Headlines ANCHOR GLASS: John Dubel Steps Down as Chief Restructuring Officer ANCHOR GLASS: Court Says Madeleine Will Hold $350,000 Escrow Fund ATA AIRLINES: Ameritech Wants Debtors' Claim Objections Overruled ATA AIRLINES: Balks at Rolls-Royce's $6.4 Million Damage Claims ATLANTIC STREET: Moody's Holds Low-B Ratings of Two Cert. Classes BEAR STEARNS: DBRS Puts BB(high) Rating on $2.1MM Class A-3 Notes BIJOU-MARKET: Wants Court to Establish June 1 as Claims Bar Date BIRCH TELECOM: Court Approves Settlements with 23 Key Parties BIRCH TELECOM: Court Approves Settlements with WilTel and Xerox BRANDYWINE REALTY: To Sell $850 Million of Senior Unsecured Notes BROWN SHOE: Earns $13.4 Million in Fourth Quarter Ended Jan. 28 BROWN SHOE: Board Okays 3-For-2 Split of Common Stock CALPINE CORP: Gets Court Nod to End Power Purchase Deal with Cleco CATHOLIC CHURCH: Spokane Wants to Hire Keen Realty as Consultant CATHOLIC: Judge Perris Won't Recuse Herself from Portland's Case CHAPMAN KELLEY: Case Summary & 10 Largest Unsecured Creditors CINRAM INT'L: Releases Financials and Board Approves Conversion CIT HOME: S&P Downgrades Class BF Loan's Rating to BB from BBB CLECO CORP: Gets Court Nod to End Power Purchase Deal with Calpine COLLINS & AIKMAN: Wants Northern Trust to Turn Over Trust Assets COLLINS & AIKMAN: Objects to Kimsworth Payment Request CONGOLEUM CORP: Posts $6.9 Mil. Net Loss in 4th Qtr. Ended Dec. 31 CREDIT SUISSE: Low Bond Credit Levels Cue Moody's Rating Review CREDIT SUISSE: Moody's Holds Junked $6 Mil. Class P Cert. Rating DANA CORP: To Pay $78.5 Million Shippers and Warehousemen Claims DELTA AIR: Flight Attendants Ask Public to Sign Support Petition DORAL FINANCIAL: Moody's Cuts Subord. Debt Rating to B2 from B1 EMERITUS CORP: Dec. 31 Equity Deficit Narrows to $113 Million ESCHELON TELECOM: S&P Rates $46 Mil. Sr. 2nd Secured Notes at B- FACTORY 2-U: Chapter 7 Trustee Taps Recovery Services as Agent FAIRFAX FINANCIAL: Fitch Puts $1.1 Bil. Debts' B+ Ratings on Watch FASSBERG CONSTRUCTION: Panel Wants to File Competing Reorg. Plan FOAMEX INT'L: Wants Plan Solicitation Period Stretched to Aug. 15 FOAMEX INT'L: Wants Until July 14 to File Notices of Removal G+G RETAIL: Otterbourg Steindler Hired as Committee's Counsel G+G RETAIL: Panel Taps Abacus Advisors as Business Consultants GALVEX CAPITAL: Committee Taps DLA Piper as Bankruptcy Counsel GALVEX HOLDINGS: Bankr. Court Allows Lenders to Replace Directors GARDENBURGER INC: Court Confirms Reorganization Plan GARDENA CITY: Moody's Places Ba2 Rating on Watch and May Upgrade GENERAL MOTORS: Kohlberg Kravis Buys GMAC Stake for $9 Billion GENESCO INC: Earns $31.2 Million in Fourth Quarter Ended Jan. 28 GLAZED INVESTMENTS: U.S. Trustee Appoints 3-Member Committee GMACM MORTGAGE: S&P Affirms 28 Certificate Classes' Low-B Ratings GOOD SAMARITAN: Moody's Holds B1 Bond Rating & Negative Outlook GRUMMAN OLSON: Court Extends Time to Object to Proofs of Claim GRUPO GIGANTE: S&P Puts BB Rating on $250 Million Notes Due 2016 HAYES LEMMERZ: Poor Performance Cues S&P to Put B+ Rating on Watch INAMED CORP: Closes Merger Deal with Allergan Inc. INT'L GALLERIES: Committee Hires Winstead Sechrest as Counsel JAKE'S GRANITE: Arizona Court Confirms Plan of Reorganization JEROME DUNCAN: U.S. Trustee Wants Case Converted to Chapter 7 JOHNSONDIVERSEY HOLDINGS: S&P Puts Low-B Ratings on Negative Watch JOHN LINEK: Case Summary & 20 Largest Unsecured Creditors KANSAS CITY SOUTHERN: S&P Puts B- Preferred Stock Rating on Watch KING PHARMA: $400 Mil. Note Offering Cues Moody's to Hold Ratings KNOLL INC: Dec. 31 Balance Sheet Shows $37.7 Mil. Positive Equity LB-UBS TRUST: Moody's Holds Junked $3 Mil. Class S Cert. Rating LIBERTY GLOBAL: Selling French Cable Unit for EUR1.25 Billion LORBER INDUSTRIES: Taps Elgort Textile as Liquidator LUCENT TECH: In Talks Over Possible Alcatel Merger MACREPORT.NET: Auditors Express Going Concern Doubt MANITOWOC CO: S&P Raises Corporate Credit Rating to BB from BB- MBA BANCO: Moody's Junks Long-Term Foreign-Currency Deposit Rating MCCANN INC: Plan Confirmation Hearing Set for April 27 MEDICALCV INC: Negative Cash Flows Prompt Going Concern Doubt MGM MIRAGE: S&P Assigns BB Rating to $750 Million Senior Notes NS REPACK: S&P Downgrades $94 Million Notes' Rating to B from B+ O-CEDAR HOLDINGS: Chapter 7 Trustee Taps RSI as Collection Agent O'SULLIVAN IND: Panel Hires Chanin as Advisor on Final Basis OCWEN RESIDENTIAL: Moody's May Downgrade B3 Certificate Rating OMEGA HEALTHCARE: Case Summary & 3 Largest Unsecured Creditors ON SEMICONDUCTOR: S&P Puts B+ Rating on $639.1 Million Term Loan OPTINREALBIG.COM: Wants Plan-Filing Period Extended Until May 5 PORTUS ALTERNATIVE: Mr. Justice Campbell Enters Bankruptcy Order PREFERREDPLUS TRUST: S&P Lowers $31.2MM Certificates' Rating to BB RED TAIL: Exclusive Plan-Filing Period Extended to April 15 REVLON INC: Completes $110 Million Class A Rights Offering RIVIERA HOLDINGS: S&P Places B Corporate Credit Rating on Watch ROYAL & SUN: S&P Lowers Ratings to BB & Holds Outlook at Negative SEARS HOLDINGS: Reports Fourth Quarter and Full Year 2005 Results SCHOLASTIC CORP: S&P Lowers Corp. Credit Rating to BB+ from BBB- SCHOOL SPECIALTY: Moody's Withdraws Ratings at Company's Request SEA CONTAINERS: 10-K Filing Delay Prompts Moody's Rating Review SPIRITCORP INC: Case Summary & 20 Largest Unsecured Creditors STELCO INC: Seeks Court Order on Amended Floating Rate Notes STELCO INC: TSX Halts Trading on 9.5% Sub. Debentures due 2007 STELCO INC: Ensures March 31 Plan Implementation Date SUPERB SOUND: Court OKs $757K Tri-Phase Sale to Audio Automation SUPERIOR ESSEX: S&P Holds Low-B Ratings & Revises Outlook to Pos. T.A.T PROPERTY: Has Until March 30 to File a Chapter 11 Plan TCR I: U.S. Trustee Wants Case Converted to Chapter 7 TECH DATA: Fitch Affirms BB+ Ratings & Changes Outlook to Stable TIME WARNER: Moody's Junks Proposed $200 Mil. Senior Notes Rating TRIMARAN CLO: Moody's Puts Ba2 Rating on $11 Mil. Class E Notes TRIMEDIA ENT: January 31 Balance Sheet Upside-Down by $7.42 Mil. VALEANT PHARMA: VISER1 Trial Results Cue Moody's to Hold Ratings VIASYSTEMS INC: S&P Affirms B Rating & Revises Outlook to Positive VILLAGES AT SARATOGA: Files Plan & Disclosure Statement in Utah VITRO S.A.: S&P Downgrades Corporate Credit Rating to B- from B * Alvarez & Marsal Hires James Decker as Managing Director * BOND PRICING: For the week of Mar. 20 - Mar. 24, 2006 ********* ANCHOR GLASS: John Dubel Steps Down as Chief Restructuring Officer ------------------------------------------------------------------ John S. Dubel, Anchor Glass Container Corporation's chief restructuring officer, terminated his employment with AP Services LLP on Feb. 28, 2006. Rebecca Roof became Anchor's chief restructuring officer on March 1, 2006. The Debtor asks the U.S. Bankruptcy Court for the Middle District of Florida to amend the Final Order authorizing AP Services' employment to reflect Ms. Roof's appointment. As reported in the Troubled Company Reporter on Jan. 10, 2006, the Bankruptcy Court authorized Anchor Glass to retain AP Services, LLC, as its crisis manager pursuant to the terms of an engagement letter dated Sept. 6, 2005. Under the APS Engagement Letter, Anchor and APS agree that: -- APS will provide, at Anchor's request, temporary employees to assist the Debtor in its restructuring efforts; and -- APS' Managing Director, John S. Dubel, will serve as the Debtor's Chief Restructuring Officer under the direct supervision of Anchor's Chief Executive Officer and the Special Committee of the Board of Directors. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Court Says Madeleine Will Hold $350,000 Escrow Fund ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida clarified that Madeleine LLC will continue to hold the $350,000 Settlement Amount until further Court order. Upon receipt of a certificate that the Plan of Reorganization has been confirmed, the Plan has become effective and the Alpha Resolution Trust has been funded, Madeleine will transfer the Reserved Payment to the Debtor's account. If the Plan is not confirmed or does not become effective, the Official Committee of Unsecured Creditors will retain all rights to urge that the Reserved Payment be payable solely to general unsecured creditors. As reported in the Troubled Company Reporter on Feb. 21, 2006, the Bankruptcy Court allowed Madeleine's claim in the reduced amount of $15,562,861. In addition, Judge Paskay authorizes Madeleine to apply and satisfy its Claim and all obligations due and owing under the Madeleine Loan Agreement from the Segregated Account. On application of the funds, Madeleine will have no further claim against the Debtor except the contingent indemnification claims in the Payoff Letter. Madeleine will hold $350,000 in an Escrow Account. Judge Paskay makes it clear that Madeleine will have no beneficial interest in or claim on the funds in the Escrow Account. Madeleine will transfer the funds in the Escrow Account to an account designated by the Committee or to the Debtor. As reported in the Troubled Company Reporter on Jan. 26, 2006, the Debtor is indebted to Madeleine pursuant to a Loan and Security Agreement dated Feb. 14, 2005. Madeleine asserted a claim in the Debtor's case for $15,373,880 as of the Petition Date. Madeleine holds a security interest in the Debtor's property, including a junior security interest on the Debtor's accounts and inventory, and certain other collateral. On Sept. 15, 2005, Debtor executed a payoff letter and tendered to Madeleine $15,912,861, which included, interest fees and costs. Madeleine received the Payoff and deposited it in a segregated account. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Ameritech Wants Debtors' Claim Objections Overruled ----------------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 28, 2006, ATA Airlines, Inc., and its debtor-affiliates objected to 12 proofs of claim filed in their Chapter 11 cases on the grounds that: (a) the amounts claimed do not match the amounts reflected in their books and records; or (b) they are not liable for the Claims. The Reorganizing Debtors asked the U.S. Bankruptcy Court for the Southern District of Indiana to disallow the 12 Claims in their entirety, or to reduce the claim amounts to the amounts shown as due and owing in their books and records. A list of the 12 Claims is available at no charge at http://researcharchives.com/t/s?6ee Ameritech Responds On January 24, 2005, Ameritech Credit Corporation, doing business as SBC Capital Services, filed a proof of claim for $1,500,720. The Debtors objected to the Claim because it does not coincide with their books and records. Ameritech acknowledges that the amount of its Claim is not accurate at that time it was filed. Nevertheless, Ameritech asserts it has a substantial claim against the Reorganizing Debtors. The parties have engaged in numerous negotiations regarding the Ameritech lease schedules. A final agreement has been reached as a result of those negotiations and Ameritech has a remaining claim for $831,388. Accordingly, Ameritech asks the Court to overrule the Debtors' objection and grant Ameritech an allowed unsecured claim for $831,388. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: Balks at Rolls-Royce's $6.4 Million Damage Claims --------------------------------------------------------------- Prior to their bankruptcy filing, ATA Airlines, Inc., and its debtor-affiliates' fleet consisted of a significant number of late model Boeing 757-200 and Boeing 757-300 aircraft. These aircraft utilized Rolls-Royce RB211-535E4 engines. The Debtors entered into a Fleet Hour Agreement dated Dec. 26, 2002 with Rolls-Royce plc whereby the Debtors would pay Rolls- Royce a fixed fee per hour flown on each RB211-535E4 engine and Rolls-Royce would then perform maintenance on the engines when necessary. The Debtors rejected the FHA on March 30, 2005. Rolls-Royce, on January 22, 2005, filed Claim No. 1357 seeking prepetition damages under the FHA totaling $6,439,337 and lease rejection damages under that same agreement totaling $269,000,000 based on an estimated rejection date of January 5, 2005. Because the Debtors believe that Rolls-Royce's claim is greatly exaggerated with regard to the lease rejection damage calculation, the Debtors object to Claim No. 1357. Representing the Debtors, Jeffrey J. Graham, Esq., notes that Rolls-Royce's claim seeks to recover all monies it would have received under the FHA from April 1, 2005, through December 31, 2011. "However, by virtue of the Debtors' rejection of the FHA prior to any major maintenance event, Rolls-Royce saved millions of dollars in parts and labor costs that would have been expended in maintaining the Debtors' Boeing 757 engines. Claim number 1357 is therefore inaccurate as it fails to take into account the future expenses saved by Rolls-Royce due to the Debtors' early rejection of the FHA." Thus, the Debtors object to Claim No. 1357 to the extent that it fails to include any mitigation by Rolls-Royce and that it fails to credit the Debtors for the service expenses Rolls-Royce will save due to the Debtors' early rejection of the FHA. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATLANTIC STREET: Moody's Holds Low-B Ratings of Two Cert. Classes ----------------------------------------------------------------- Moody's Investors Service affirmed these ratings of UBS 400 Atlantic Street Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2002-C1A: * Class B-1, $7,500,000, Fixed, affirmed at Baa1 * Class B-2, $4,200,000, Fixed, affirmed at Baa2 * Class B-3, $5,000,000, Fixed, affirmed at Baa3 * Class B-4, $4,235,000, Fixed, affirmed at Ba1 * Class B-5, $8,844,309, Fixed, affirmed at Ba2 The Certificates are collateralized by a $29,779,310 subordinate mortgage note on 400 Atlantic Street, a 15-story, 499,198 square foot, Class A office building located in Stamford, Connecticut. The property is currently 91.6% leased, compared to 100.0% at securitization. Approximately 83.0% of the building is leased to credit tenants including American Express, UBS, Abbey National Plc, and International Paper Company. American Express, which leases approximately 38.0% of the building's net rentable area, occupies only a portion of its space and has subleased the majority of the vacant space to UBS at a significantly reduced rate. Additionally, American Express, whose lease expires in September 2011, has the right to terminate its lease on Sept. 30, 2008 with the payment of an $8.5 million termination fee. Lease rollover prior to the American Express termination option date in September 2008 is limited to UBS, which leases 14.7% of the net rentable area through September 2007. International Paper whose lease expires in December 2015 has announced that it will be vacating the building in the 3rd Quarter of 2006. The Stamford Class A office market vacancy is currently in excess of 17.0%. Inventory will increase by an additional 132,000 square feet with the departure of International Paper Company from the building. Moody's loan to value ratio is 77.1%, compared to 76.0% at Moody's last review in September 2004 and compared to 70.1% at securitization. Moody's is affirming Classes B-1 through B-5 but will continue to closely monitor the building's performance. BEAR STEARNS: DBRS Puts BB(high) Rating on $2.1MM Class A-3 Notes ----------------------------------------------------------------- Dominion Bond Rating Service assigned these to the NIM Notes, Series 2006-11, issued by Bear Stearns Structured Products Inc. NIM Trust 2006-11: * $31.0 million, NIM Notes, Series 2006-11, Class A-1 -- New Rating A (low) * $5.1 million, NIM Notes, Series 2006-11, Class A-2 -- New Rating BBB (low) * $2.1 million, NIM Notes, Series 2006-11, Class A-3 -- New Rating BB (high) The NIM Notes are backed by a 100% interest in the Class C Certificates issued by SACO I Trust, 2006-3. The underlying Class C Certificates will be entitled to receive the excess cash flows, if any, generated by the Mortgage Loans each month after payment of all the required distributions, as well as all prepayment premiums or charges received in respect of the mortgage loans. The NIM Notes will also be entitled to the benefits of the Underlying Swap Agreement with Wachovia Bank, National Association. Payments on the NIM Notes will be made on the 25th of each month commencing in March 2006. Interest and then principal will be paid sequentially to the Classes A-1, A-2, and A-3 note holders until the principal balance of each such class has been paid to zero. Any remaining amounts will be paid in full to the holders of the Class C Notes issued by the NIM Trust. Class C Notes are not rated by DBRS. The mortgage loans in the Underlying Trust were originated or acquired by various originators, including American Home Mortgage Investment Corp. All loans are fixed-rate, second-lien mortgage loans that are subordinate to the senior lien mortgage loans on the respective properties. BIJOU-MARKET: Wants Court to Establish June 1 as Claims Bar Date ---------------------------------------------------------------- Bijou-Market, LLC, asks the U.S. Bankruptcy Court for the Northern District of California to establish June 1, 2006, as the general deadline for filing proofs of claim. The Debtor tells the Court that it will be unable to proceed with efforts to reorganize until it can identify the universe of claims against it. The Debtor says that in addition to creditors, it plans to also provide notice to all its employees including all dancers who worked at the Debtor's clubs since 1999. Bijou-Market, LLC -- http://www.msclive.com/-- operates an adult entertainment facility on Market Street in San Francisco. The company filed for chapter 11 protection on Feb. 28, 2006 (Bankr. N.D. Calif. Case No. 06-30118). Michael St. James, Esq., at St. James Law, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets totaling $620,458 and debts totaling $66,308,352. BIRCH TELECOM: Court Approves Settlements with 23 Key Parties ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Birch Telecom, Inc., and its debtor-affiliates' Settlement Term Sheets with 23 Key Parties. The Court entered its order on March 22, 2006. The Court also authorized the Debtors to execute any documents necessary to consummate the Settlements. The 23 Key Parties are: * Ace*Com; * Broadwing Communications LLC; * CIENA Communications Inc.; * Consolidated Communications Operator Services Inc.; * Dynavar Corporation; * Fair Isaac Corporation; * Grande Communications Networks, Inc.; * Keith L. Anderson, dba Northrock Business Park * Lucent Technologies Inc.; * MeGregor Intreats Freeway, LLC; * MCI Communications Services Inc., dba Verizon Business Services; * Mclead USA, Incorporated; * NTT Communications; * Positive Networks, Inc.; * Qwest Corporation & Qwest Communications Corporation; * Receivable Management Services; * SalesNet, Inc.; * South Dakota Network, LLC; * Software Plus; * Speedway Inc.; * Telcove Inc.; * Verisign, Inc.; and * VoiceLog, LLC. A 25-page summary of each Settlement Term Sheet is available for free at http://ResearchArchives.com/t/s?6e8 Under the Settlements, the Debtors and each of the Key Parties resolve: 1) disputes regarding proofs of claim filed by each Key Party and any claims associated with the Debtors' assumption of any agreements with the Key Party; and 2) the terms of their business relationships going forward. The Debtors gave the Court two reasons for approving the Settlements: 1) the Settlement Agreements are fair, reasonable, equitable and in the best interests of the Debtors' estates; 2) the Settlements provide valuable benefits to their estates; because they: a) reduce general unsecured claims against the estate and reduce cure payments; and b) maintain services by the Key Parties to the Reorganized Debtors through the Debtors' assumption of executory contracts or real property leases or the Debtors' rejection of the Agreements under the Settlements with an option to enter into a new agreement with the Key Party on the effective date of the Settlement. Headquartered in Kansas City, Missouri, Birch Telecom, Inc., and its subsidiaries -- http://www.birch.com/-- own and operate an integrated voice and data network, and offer a broad portfolio of local, long distance and Internet services. The Debtors provide local telephone service, long-distance, DSL, T1, ISDN, dial-up Internet access, web hosting, VPN and phone system equipment for small- and mid-sized businesses. Birch Telecom and 28 affiliates filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del. Case Nos. 05-12237 through 05-12265). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents Birch and its debtor-affiliates in its second chapter 11 restructuring since 2002. Robert P. Simons, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, provide the Official Committee of Unsecured Creditors with legal advice and Chanin Capital Partners LLC provides the Committee with financial advisory services. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. BIRCH TELECOM: Court Approves Settlements with WilTel and Xerox --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Birch Telecom, Inc., and its debtor-affiliates' Settlement Agreements with WilTel Communications, LLC and Xerox Corporation. The Court entered its order on March 22, 2006. The Court also authorized the Debtors to execute any documents necessary to execute the two Settlement Agreements. Summary of the WilTel and Xerox Settlements Under the WilTel Settlement: 1) the Debtors will assume the Master Services Agreement and the Debtors and WilTel will amend that Agreement in accordance with the terms of the Settlement Document; and 2) in full satisfaction of the Debtors' cure obligation owed to WilTel and in full satisfaction of WilTel's prepetition obligations to Birch Telecom, WilTel will pay Birch Telecom a negotiated amount within three business days after the effective date of the Settlement, provided, however, that if the Debtors are in default of their obligations to WilTel on the payment date, then WilTel has the right to: a) exercise setoff or recoupment rights against the payment or alternatively defer the payment date until the Debtors become current in their payment obligations to WilTel; and b) waive all prepetition claims against the Debtors and WilTel and the Debtors will exchange mutual releases, including Chapter 5 causes of action under the Bankruptcy Code. Under the Xerox Settlement: 1) the Debtors will assume the existing contract with Xerox Corporation as amended according to the terms of Settlement Document and Xerox consents to the assumption of that Document; 2) the Debtors will pay no cure in connection with the assumption of the Settlement Document, provided, that the Debtors will pay all amounts for postpetition services that are due after Feb. 27, 2006; and 3) Xerox will waive all prepetition claims against the Debtors and the Debtors and Xerox will exchange mutual releases, including Chapter 5 causes of action. The Debtors told the Court that each Settlement was reached after extensive arm's-length negotiation. Those two Settlements represent a fair and reasonable compromise, provides important benefits to the Debtors' estates and is in the best interest of their estates and creditors. Headquartered in Kansas City, Missouri, Birch Telecom, Inc., and its subsidiaries -- http://www.birch.com/-- own and operate an integrated voice and data network, and offer a broad portfolio of local, long distance and Internet services. The Debtors provide local telephone service, long-distance, DSL, T1, ISDN, dial-up Internet access, web hosting, VPN and phone system equipment for small- and mid-sized businesses. Birch Telecom and 28 affiliates filed for chapter 11 protection on Aug. 12, 2005 (Bankr. D. Del. Case Nos. 05-12237 through 05-12265). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represents Birch and its debtor-affiliates in its second chapter 11 restructuring since 2002. Robert P. Simons, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, provide the Official Committee of Unsecured Creditors with legal advice and Chanin Capital Partners LLC provides the Committee with financial advisory services. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. BRANDYWINE REALTY: To Sell $850 Million of Senior Unsecured Notes ----------------------------------------------------------------- Brandywine Realty Trust's (NYSE:BDN) operating partnership, Brandywine Operating Partnership, L.P., has entered into an underwriting agreement to sell $850 million of unsecured notes consisting of: * $300 million of floating rate notes due April 1, 2009 bearing interest at a floating rate per year equal to three month Libor plus 0.45%, * $300 million of 5.75% notes due April 1, 2012 and * $250 million of 6% notes due April 1, 2016. Interest on the 2009 notes will be payable quarterly and interest on the 2012 and 2016 notes will be payable semi-annually, commencing 2006. Settlement is scheduled for March 28, 2006. Net proceeds from the offering are expected to repay in full borrowings under the Company's $750 million term loan agreement and to repay a portion of borrowings under the company's revolving credit facility. All securities in the offering are rated Baa3 by Moody's Investors Service and BBB- by Standard & Poor's and Fitch Ratings. Joint book-running managers for the offering are: * JPMorgan, * Wachovia Securities, and * Merrill Lynch & Co. Senior co-managers are: * RBS Greenwich Capital and * Wells Fargo Securities. Co-managers are: * BNY Capital Markets, Inc., * Commerzbank Corporates & Markets, * Piper Jaffray, PNC Capital Markets LLC, and * SunTrust Capital Markets, Inc. Copies of the prospectus supplement and prospectus relating to the offering may be obtained from: J. P. Morgan Securities Inc., 270 Park Avenue New York, NY 10017 High Grade Syndicate Desk Telephone (212) 834-4533 or Wachovia Securities 8739 Research Drive Charlotte, NC 28262 Telephone (800) 326-5897 or Merrill Lynch & Co. 4 World Financial Center New York, NY 10080 Syndicate Desk Telephone (212) 449-4916 About Brandywine Realty Trust With headquarters in Plymouth Meeting, Pennsylvania and regional offices in Mt. Laurel, New Jersey and Richmond, Virginia, Brandywine Realty Trust -- http://www.brandywinerealty.com/-- is one of the Mid-Atlantic region's largest full service real estate companies. Brandywine owns, manages or has an ownership interest in 299 office and industrial properties, aggregating 24.2 million square feet. * * * Brandywine Realty Trust's Preferred Stock carries Moody's Investors Service's Ba1 rating and Standard & Poor's BB+ rating. BROWN SHOE: Earns $13.4 Million in Fourth Quarter Ended Jan. 28 --------------------------------------------------------------- Brown Shoe Company, Inc. (NYSE: BWS) reported its financial results for the fourth quarter of fiscal 2005, ended Jan. 28, 2006. For the fourth quarter, net sales rose 25.8% to $599.6 million, from $476.5 million in the year-ago quarter. Net earnings rose 56.4% to $13.4 million compared with net earnings of $8.5 million in 2004. The fourth quarter fiscal 2005 net earnings reflect charges of $6.6 million related to the Company's closing of underperforming Naturalizer stores and the repatriation of foreign earnings. Excluding these charges, adjusted earnings were $20.0 million versus adjusted earnings of $9.7 million for the year-ago period, which included net charges of $1.2 million related to a bond guarantee and a tax adjustment. "We had a terrific year. Momentum built with each quarter as our wholesale and retail initiatives produced strong results for our Company," Ron Fromm, Chairman and Chief Executive Officer said. "Our better-than-expected fourth quarter results were driven by record sales at Famous Footwear and a rebound in our wholesale business. We also were pleased by the performance of our Bennett brands. Bennett, which we acquired in April 2005, contributed $0.17 per share to our full-year earnings results -- in line with our expectations. In addition, we significantly increased our cash flow from operations, managed our inventories and strengthened our balance sheet." "In summary, while the footwear industry in general experienced good growth, our initiatives in 2005 have paid off and we believe we are well positioned to achieve our goals in 2006 and beyond," he said. "In addition, we believe our solid top-line performance demonstrates the strong earnings leverage we can realize from sales gains." Full-Year Results Net sales for the 52 weeks of fiscal 2005 rose 18.0% to a record $2.3 billion, compared to $1.9 billion the year before. For fiscal 2005, Brown Shoe net earnings were $41.0 million compared to $43.3 million, or $2.30 per diluted share in fiscal 2004. Earnings for fiscal 2005 include $21.9 million share, of charges related to the Company's closing of underperforming Naturalizer stores, financing its Bennett acquisition and the repatriation of foreign cash. Accordingly, adjusted earnings for the full year were $62.9 million up 30% from adjusted earnings of $48.3 million, in fiscal 2004, which included $5.0 million of items related to the Bass transition and other net charges. Results for Famous Footwear For the fourth quarter, Famous Footwear net sales increased 8.0% to $284.1 million from $263.1 million a year ago. The chain increased same-store sales by 4.4%, as both its average unit retail prices and traffic levels were up for the quarter. Same-store sales were positive in all major categories, led by juniors' and women's fashion footwear and kids' non-athletic footwear; athletics were up slightly. Operating earnings were up 34.4% to $15.0 million, from $11.2 million for the year-ago quarter. For fiscal 2005, Famous Footwear sales increased 6.3% to $1.2 billion from $1.1 billion in 2004. Same-store sales increased 2.5%. The chain achieved an 11.2% increase in operating earnings to $67.0 million, versus $60.3 million in fiscal 2004. Famous Footwear opened 74 new stores and closed 40, to end the year with 953 stores. Total square footage increased 3.4% to 6.7 million square feet at the end of fiscal 2005. For 2006, plans are to open about 90 stores and close about 40-50 stores. "We achieved a record year at Famous Footwear," Mr. Fromm said. "The Famous Footwear management team did an outstanding job of execution, driving double-digit operating earnings gains through improved product assortments, good inventory management and expense control, and the effective use of themed marketing (across our advertising, in-store, and in our direct-to-customer pieces). As a result, our traffic levels were up every quarter versus last year, as customers responded well to our offerings." Results for Wholesale Division For the fourth quarter, Wholesale sales were $249.8 million, rising 57.3% from $158.8 million a year ago, due in part to strong year-end shipments and a $71.2 million contribution from the newly acquired Bennett division. Operating earnings more than doubled to $27.1 million from $12.7 million in the year-ago quarter. The Bennett division contributed $5.9 million to operating earnings. For the full year, Wholesale sales increased 40.4% to $864.9 million, from $615.9 million in 2004, including a $186.2 million contribution from the Bennett division. Wholesale operating earnings were $80.1 million, increasing 78.4% from $44.9 million a year ago. Year-over-year gains in operating earnings were driven by a rebound of the Naturalizer brand and the children's business and by solid contributions from the Dr. Scholl's and the Bennett brands. Bennett contributed $13.9 million to operating earnings; after inclusion of interest costs to finance the acquisition. For comparison purposes, excluding the 2005 contributions from Bennett and the 2004 costs of $5.6 million associated with the Bass transition, wholesale operating earnings rose 31 percent in 2005 versus 2004. At year-end, unfilled orders for the Wholesale division were down 2.5% from year-ago levels, excluding the orders of the Bennett division. This decline reflects the move to an improved sell-in business model at Naturalizer in Spring 2005. The year-over-year unshipped order comparison excluding Naturalizer was up 7.5%. "We feel good about the progress at Naturalizer," Mr. Fromm said. "Despite the short-term consolidation pressures in the department store channel, our sell-through business model allows us to increase our deliveries of fresh product and meet retailers' goals of buying closer to need." "It also has allowed us to decrease our inventory and increase 'turns.' Going forward, our strategy is to continue providing a continuous flow of fresh merchandise at retail to maximize sell- through and profit growth." Results for Specialty Retail The Specialty Retail division, which is comprised of 314 stores in North America -- under the Naturalizer, F.X. LaSalle and Via Spiga names and the e-commerce subsidiary, Shoes.com -- posted sales of $65.7 million in the fourth quarter of 2005, versus $54.7 million in the year-ago quarter. An operating loss of $6.7 million was incurred in the quarter, compared to an operating loss of $4.7 million the year before. The operating loss in the 2005 quarter includes $6.5 million of expenses associated with the closure of 66 underperforming Naturalizer stores. Same-store sales for the quarter were up 4.5%. Last June, the Company announced a series of initiatives to strengthen its flagship Naturalizer brand by closing underperforming stores and consolidating retail administration. The initiative resulted in the closing of 95 stores. For the full year, sales for the division were $240.0 million, compared to $209.2 million for 2004. In 2005, 49 stores were opened; 110 were closed. An operating loss of $22.7 million was incurred in 2005, compared to an operating loss of $11.2 million in 2004. The operating loss in 2005 included costs of $14.1 million related to closing the underperforming Naturalizer stores and consolidation of Canadian operations. These results reflect a 1.8% same-store sales increase. At year's end, there were 314 Specialty Retail stores, compared to 375 at the end of fiscal 2004. Plans are to open approximately 11 stores and close about 25 stores in fiscal 2006. "Our planned restructuring of the Naturalizer store base was completed on time and within budget," Mr. Fromm said. "Having closed 95 unprofitable stores, we now operate a better positioned store base, which should provide a more positive economic contribution and enable us to build stronger preference for the Naturalizer brand. "In addition, we are pleased with the progress made by our e- commerce sites, especially Shoes.com," Mr. Fromm said. "Shoes.com has achieved a compound growth rate of approximately 100% since acquired by Brown Shoe in 2001, as we've significantly expanded our brand and product offering." "Looking ahead, the financial estimates for 2006 reflect some shifting of earnings between the first and second quarters, resulting in part from the new Naturalizer business model which is built around quality 'sell-in' and reduced markdown and allowance exposure," Mr. Fromm said. "Furthermore, they take into consideration the later timing of 2006 children's license sales, as well as an impacted shift in wholesale product flow following strong 2005 year end shipments which are expected to impact order timing in the first half of 2006." About Brown Shoe Company Headquartered in St. Louis, Missouri, Brown Shoe Company, Inc. -- http://www.brownshoe.com/-- is a $2.3 billion footwear company with global operations. The Company operates the 900+ store Famous Footwear chain, which sells brand name shoes for the family. It also operates 300+ specialty retail stores in the U.S. and Canada under the Naturalizer, FX LaSalle and Via Spiga names, and Shoes.com, the Company's e-commerce subsidiary. Brown Shoe, through its Wholesale divisions, owns and markets leading footwear brands including Via Spiga, Naturalizer, LifeStride, Nickels Soft, Connie and Buster Brown; it also markets licensed brands including Franco Sarto, Dr. Scholl's, Etienne Aigner, Bass and Carlos by Carlos Santana for adults, and Barbie and Disney character footwear for children. * * * As reported in the Troubled Company Reporter on Apr. 18, 2005, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on specialty footwear retailer and wholesaler Brown Shoe Co. Inc. The rating was removed from CreditWatch, where it was placed with negative implications on March 16, 2005. S&P said the outlook is negative. At the same time, Standard & Poor's assigned its 'BB-' rating to Brown Shoe's proposed $150 million senior unsecured notes due 2012. These notes, to be offered pursuant to Rule 144A with registration rights, are rated one notch below the corporate credit rating due to the substantial amount of priority debt in the capital structure (including borrowings from the company's $350 million secured revolving credit facility) relative to total assets. Pro forma for the transaction, total funded debt reaches about $307 million. At the same time, Moody's Investors Service assigned a B1 rating to Brown Shoe Company, Inc.'s $150 million guaranteed senior unsecured notes due 2012, a Ba3 senior implied rating, a B2 issuer rating, and an SGL-2 Speculative Grade Liquidity Rating. Moody's said the outlook is stable. BROWN SHOE: Board Okays 3-For-2 Split of Common Stock ----------------------------------------------------- The Board of Directors of Brown Shoe Company, Inc. (NYSE: BWS) authorized a 3-for-2 split of the Company's Common Stock, to be effected in the form of a stock dividend of one share of the Company's Common Stock for every two shares outstanding. The Board also approved a 20% increase in its quarterly cash dividend. The cash dividend increase raises the pre-split quarterly cash dividend from $0.10 per share to $0.12 per share. On a post-split basis, the cash dividend would equal $0.08 per share. The record date for the stock split and the cash dividend is March 17, 2006. Stockholders will receive one new share of common stock for every two shares they own and will receive cash in lieu of fractional shares, based on the closing price of the Company's common stock on the record date, as adjusted for the stock dividend. Stockholders also will be paid a quarterly cash dividend of $0.12 per share on a pre-split basis. Both the cash dividend and the stock dividend will be payable on April 3, 2006. "The dividend increase demonstrates our commitment to maximizing shareholder value and reflects our strong cash flow and operating results," Brown Shoe Chairman and CEO Ron Fromm said. "We believe this stock split provides an opportunity to broaden our base of investors by making our stock more accessible while improving its trading liquidity." With this dividend, Brown Shoe will have paid cash dividends for 333 consecutive quarters. With the split, the number of shares outstanding will rise from approximately 18.5 million shares to approximately 27.8 million shares. About Brown Shoe Company Headquartered in St. Louis, Missouri, Brown Shoe Company, Inc. -- http://www.brownshoe.com/-- is a $2.3 billion footwear company with global operations. The Company operates the 900+ store Famous Footwear chain, which sells brand name shoes for the family. It also operates 300+ specialty retail stores in the U.S. and Canada under the Naturalizer, FX LaSalle and Via Spiga names, and Shoes.com, the Company's e-commerce subsidiary. Brown Shoe, through its Wholesale divisions, owns and markets leading footwear brands including Via Spiga, Naturalizer, LifeStride, Nickels Soft, Connie and Buster Brown; it also markets licensed brands including Franco Sarto, Dr. Scholl's, Etienne Aigner, Bass and Carlos by Carlos Santana for adults, and Barbie and Disney character footwear for children. * * * As reported in the Troubled Company Reporter on Apr. 18, 2005, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on specialty footwear retailer and wholesaler Brown Shoe Co. Inc. The rating was removed from CreditWatch, where it was placed with negative implications on March 16, 2005. S&P said the outlook is negative. At the same time, Standard & Poor's assigned its 'BB-' rating to Brown Shoe's proposed $150 million senior unsecured notes due 2012. These notes, to be offered pursuant to Rule 144A with registration rights, are rated one notch below the corporate credit rating due to the substantial amount of priority debt in the capital structure (including borrowings from the company's $350 million secured revolving credit facility) relative to total assets. Pro forma for the transaction, total funded debt reaches about $307 million. At the same time, Moody's Investors Service assigned a B1 rating to Brown Shoe Company, Inc.'s $150 million guaranteed senior unsecured notes due 2012, a Ba3 senior implied rating, a B2 issuer rating, and an SGL-2 Speculative Grade Liquidity Rating. Moody's said the outlook is stable. CALPINE CORP: Gets Court Nod to End Power Purchase Deal with Cleco ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved a request giving Acadia Power Partners LLC, a joint venture between subsidiaries of Cleco Corp. (NYSE:CNL) and Calpine Corp., the right to remarket the output of its 1,160-megawatt plant. In addition, the Court approved the mutual termination of a power purchase agreement between Cleco's utility, Cleco Power LLC, and Calpine Energy Services, L.P. The agreement called for CES to supply Cleco Power 200 megawatts through the end of 2006. "We've already signed agreements to ensure Cleco Power will have a reliable supply of electricity to meet our customers' needs," Cleco Corp. President and CEO Michael Madison said. The Court's actions stemmed from CES' request to reject its tolling agreements for the output of the Acadia Power Partners' plant. CES asked to reject the Acadia tolling agreements the day after Calpine, CES and other Calpine subsidiaries filed for Chapter 11 bankruptcy protection in December 2005. CES' request to reject the tolling agreements is still pending. CES stopped making payments to APP under the tolling agreements after it filed for bankruptcy. APP filed a motion asking the Bankruptcy Court to approve a waiver of CES' exclusive rights under the tolling agreements to sell the output of the Acadia plant so APP could start remarketing the plant's power. The Court also accepted a stipulation by Cleco Power and CES to terminate the remainder of the one-year 200-megawatt contract. The contract required CES to provide power from the Acadia plant, which is located just south of Eunice. With APP's request to take over marketing Acadia's output, CES would have been unable to satisfy its Cleco Power contract because it would no longer have rights to power produced by the Acadia plant. APP is preparing to market the plant's output on a short-term basis while continuing to explore its long-term options. About Cleco Corp. Headquartered in Pineville, Louisiana, Cleco Corp. -- http://www.cleco.com/-- is a regional energy provider, which operates a regulated electric utility company that serves about 267,000 customers across the state. Cleco also operates a wholesale energy business that has approximately 1,350 megawatts of generating capacity. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CATHOLIC CHURCH: Spokane Wants to Hire Keen Realty as Consultant ---------------------------------------------------------------- Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller LLP, informs the U.S. Bankruptcy Court for the Eastern District of Washington that the Diocese of Spokane intends to sell two properties consisting of parcels of land: (1) Parcel No. 14121.9027 located at the Northwestern intersection of Hayford Road and Interstate 90 in Section 12, Township 24 North, Range 41 E.W.M., Spokane County -- the Hayford Property; and (2) Parcel Nos. 45334.0113, 45334.0114 and 45334.9135 in Tomlin's Addition to Chester and Section 33, Township 25 North, Range 44 E.W.M., Spokane County -- the Chester Property. Due to the commercial nature of the Property, the Diocese believes that exposure to a national market is necessary to obtain the highest sales price possible. Accordingly, the Diocese decided to engage the services of Keen Realty, LLC, as its special real estate consultant. Keen Realty has more than 20 years of experience in which it had served as real estate broker and real estate consultant in many bankruptcy cases. The Diocese and Keen Realty entered into a Real Estate Retention Agreement on February 13, 2006. By this application, the Diocese seeks the Court's permission to employ Keen Realty as its special real estate consultant. Under the Real Estate Retention Agreement, Keen Realty will: a. review all pertinent documents and consult with the Diocese's counsel; b. develop and implement a marketing program, which may include newspaper, magazine or journal advertising, letter or flyer solicitation, placement of signs, direct telemarketing, and other methods; c. locate and communicate with all potential purchasers of the Properties including investors, developers, tenants, and others; d. respond and provide information to, negotiate with, and solicit offers from prospective purchasers, and make recommendations to the Diocese as to the advisability of accepting particular offers; e. meet periodically with the Diocese, its accountants and attorneys, in connection with the status of its efforts; f. implement, manage and run an auction process, as appropriate and in consultation with the Diocese and its counsel; g. work with the attorneys responsible for the implementation of the proposed transactions, reviewing documents, negotiating and assisting in resolving problems which may arise; and h. if required, appear in Court during the duration of its employment, to testify or to consult with the Diocese in connection with the marketing or disposition of the Properties. Keen Realty's compensation will be determined by the "gross proceeds" of the sale or disposition. Gross proceeds include the sum of the total consideration transferred to, or for the benefit of, the Diocese, unless the Properties are sold or disposed of as part of a package of properties. In the case of the sale or disposition of the Properties as part of a package of other properties, the Bankruptcy Court will, at the time of the entry of an Order approving the transaction, allocate a value to the Properties to calculate Keen Realty's compensation. With respect to the Hayford Property, Keen Realty's compensation will be: 4% of the first $950,000 of the Gross Proceeds, plus 8% of the Gross Proceeds in excess of $950,000 With respect to the Chester Property, Keen Realty's compensation will be 10% of the Gross Proceeds. In the event of a transfer of title of the Properties by deed or otherwise to a post-confirmation trust, Mr. Paukert says that the Real Estate Retention Agreement will remain in full force and effect and will be binding on the Trust. However, Keen Realty will not be entitled to compensation as a result of the transfer. Keen Realty's compensation will also be taken from the proceeds of sale. Mr. Paukert notes that Keen Realty will not receive a fee in assisting the Diocese in seeking and obtaining Bankruptcy Court approval of the Real Estate Retention Agreement and approval for the sale of the Properties. However, the Diocese will pay Keen Realty on an hourly basis for its time, including travel time, at the prevailing local hourly rates that will be established by the Bankruptcy Court after notice and a hearing, in connection with providing: -- any real estate consulting services expressly requested in writing not otherwise covered by the terms and conditions of the Real Estate Retention Agreement; and -- any pre-hearing service, litigation support, depositions regarding the Property or time spent as a witness in connection with any matter. According to Mr. Paukert, Keen Realty has reviewed the Diocese's schedules of creditors. Keen Realty determined that its representation of the Diocese would not violate any Code or Rules of Professional Conduct. About Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC: Judge Perris Won't Recuse Herself from Portland's Case ---------------------------------------------------------------- While reviewing the materials for a request for summary judgment in one of the adversary proceedings in the Archdiocese of Portland's Chapter 11 case, Judge Elizabeth Perris came across a 1989 letter written by Archbishop William Levada to the Oregon State Bar. Archbishop Levada, who was Portland's Archbishop from 1986 to 1995, complained about the conduct of its former counsel, Robert McMenamin. Judge Perris notes that she practiced in the same law firm as Mr. McMenamin from September 1977 through December 1982. The Letter indicated that Mr. McMenamin had represented the Archdiocese for many years, including during the period within which Judge Perris practiced in that law firm. The law firm was dissolved within a few years after Judge Perris left. Mr. McMenamin died in 1998. Judge Perris says that she has no recollection of the law firm, Mr. McMenamin, or any lawyer in the firm representing the Archdiocese while she was associated with it. To determine whether she should recuse herself from all or part of the Archdiocese's bankruptcy case, Judge Perris asked the Archdiocese's counsel to investigate on the matter. She also asked other major parties in the Archdiocese' bankruptcy cases to supply her with information about Mr. McMenamin's representation. Subsequently, through the parties' reports, Judge Perris determined that although Mr. McMenamin represented the Archdiocese in 1983, the representation was merely incidental. Furthermore, Mr. McMenamin's regular representation of the Archdiocese did not begin until 1983, which was the year she left the firm. "There is no evidence," Judge Perris finds, "that, while I was practicing law with Mr. McMenamin, he represented the Archdiocese on any matters that are before me in this bankruptcy case or any of the associated adversary proceedings." Therefore, Judge Perris concludes, her recusal is not required. About Archdiocese of Portland The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHAPMAN KELLEY: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Chapman Kelley 301 West Wisconsin Chicago, Illinois 60614 Bankruptcy Case No.: 06-03052 Chapter 11 Petition Date: March 24, 2006 Court: Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Scott R. Clar, Esq. Crane Heyman Simon Welch & Clar 135 South Lasalle, Suite 3705 Chicago, Illinois 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ John A. Viramontes $13,000 2618 North Merrimac Chicago, IL 60639 People's Energy $7,857 130 East Randolph Drive Chicago, IL 60601 Barone & Jenkins, P.C. $4,700 721 Enterprise Drive, #200 Oak Brook, IL 60523 Citi $3,799 Richard Balough $2,440 Kupisch & Carbon Ltd. $2,184 Chase $1,580 Sears $853 Providian $818 Bank of America $657 CINRAM INT'L: Releases Financials and Board Approves Conversion --------------------------------------------------------------- Cinram International Inc. (TSX: CRW) reported its financials results for the quarter and year ended Dec. 31, 2005, The Board of Directors of Cinram International unanimously approved the conversion of Cinram from a corporation into an income trust by way of a plan of arrangement, subject to shareholder and court approvals and some other conditions. "This is an exciting day for Cinram's shareholders and for the evolution of the Company. The Conversion will allow shareholders to participate in the strong operating cash flows generated by our businesses," Isidore Philosophe, co-founder and Chief Executive Officer stated. "Cinram's results for the fourth quarter and year ended Dec. 31, 2005, combined with our strong cash flow supports our income trust conversion plans." Cinram reported an increase in consolidated revenue to $2,098.1 million in 2005, compared to $2,026.6 million in the prior year. Net earnings increased to $82.4 million in 2005, compared to $75.8 million in 2004. The Company generated earnings before interest, taxes and amortization of $390.9 million for the year ended Dec. 31, 2005, compared to $382.1 million in the prior year. The increase was primarily due to higher DVD sales combined with cost savings, partially offset by lower VHS video cassette revenues and higher raw material costs. For the fourth quarter, Cinram reported consolidated revenue of $650.0 million, compared to $644.2 million for the same quarter in the prior year. Net earnings for the quarter were $38.2 million compared to $34.6 million for the same quarter in 2004. In the fourth quarter of 2005, EBITA was $122.1 million, compared to $123.2 million for the same quarter in the prior year. Product revenues In 2005, DVD revenue increased four percent to $1,063.0 million, compared to $1,025.4 million in the prior year. The increase was mainly due to higher unit volumes, partially offset by lower selling prices. In 2005, DVD revenue accounted for approximately 51% of consolidated revenue, unchanged compared to the prior year. The Company's CD revenue increased three percent to $322.0 million, compared to $313.4 million in the prior year, mainly due to the full-year contribution of the EMI business in the United States. Audio CDs accounted for approximately 15% of Cinram's 2005 consolidated revenue, unchanged compared to the prior year. The printing segment, which encompasses the results of Ivy Hill Corporation, generated revenue of $234.0 million in 2005, compared to $225.4 million in the prior year. Printing accounted for approximately 11% of consolidated revenue in 2005, unchanged compared to the prior year. Distribution revenue increased to $290.3 million in 2005, compared to $208.8 million in the prior year. The increase was primarily due to the full-year contribution of the business acquired from The Entertainment Network in the United Kingdom and a new contract in Europe. Distribution revenue represented approximately 14% of 2005 consolidated revenue, compared to 10% in the prior year. Geographic revenues North American revenue increased 1% to $1,556.3 million in 2005, compared to $1,534.2 million in the prior year, which was attributable to increased audio CD and distribution revenues, offset by lower VHS cassette and merchandising revenues. In 2005, North American revenue represented 74% of consolidated revenue, compared to 76% in the prior year. In Europe, revenue in 2005 increased 10% to $541.8 million, compared to $492.4 million for the prior year, due to increased DVD and distribution revenues, partially offset by lower audio CD and VHS video cassette revenues. European revenue represented 26 percent of consolidated revenue in 2005, compared to 24% in the prior year. Other financial highlights Gross profit margins in 2005 declined slightly to 19.6% from 20.3% in the prior year, as annual DVD price declines were partially offset by cost efficiencies. In addition, capital asset amortization, which is included in cost of goods sold, increased by $7.2 million. Selling, general and administrative expenses for the year were 8.0% of consolidated revenue in 2005, compared to 8.8% in the prior year, as the Company benefited from cost savings associated with the closure of its printing facility in New York state, combined with general staffing reductions. Amortization of capital and intangible assets increased to $223.9 million, compared to $219.7 million in 2004, mainly due to capital assets purchased during the year of $99.8 million, partially offset by a decrease in amortization of intangible assets and deferred financing fees of $3.0 million. Pre-tax earnings for the year were reduced by unusual items in the amount of $6.3 million, compared to a gain of $1.7 million in the prior year. Dividend The Board of Directors has declared a quarterly dividend of C$0.03 per share, payable on March 31, 2006, to the shareholders of record at the close of business on March 15, 2006. Conversion to Income Trust Pursuant to the Conversion, the current shareholders of Cinram will exchange their common shares for units of a newly formed income trust, and Class B exchangeable limited partnership units of a limited partnership owned by the Fund, on a one-for-one basis. The Exchangeable LP Units will be entitled to equivalent distributions, to vote at meetings of Unitholders of the Fund and to exchange their Exchangeable LP Units for Units (at any time after the lapse of 90 days from the effective date of the Conversion) and will be subject to a maximum number of units to be issued. The current shareholders of Cinram will continue to own, through their Units or Exchangeable LP Units, the same pro rata economic interest in Cinram's businesses. "This structure will enable us to increase cash distributions to our shareholders without compromising our ability to adapt to technological developments and to maintain Cinram's industry leadership in the years to come," Mr. Philosophe added. Background to the Conversion On April 25, 2005, Cinram's Board of Directors authorized management to study the viability of converting the Company into an income trust type structure to enhance shareholder value. Management and its legal, financial and tax advisors studied the appropriateness of a potential conversion in the context of several key objectives including: -- Optimizing distributable cash flow and cash distributions to Cinram's shareholders; -- Taking into account Cinram's multi-jurisdictional operations and cash flows that span Canada, the United States and Europe; -- Preserving Cinram's program of substantial capital reinvestment in its facilities and new technology to sustain its growth and profitability in the evolving media replication industry; -- Ensuring access to the capital markets to fund growth and potential acquisitions with a strong public markets currency; -- Allowing investors to focus on the strong cash flow profile of Cinram; -- Maintaining Cinram's inclusion in the S&P/TSX Composite Index; and -- Restructuring Cinram's debt facilities to increase cash available for distribution to shareholders. There were several regulatory developments that influenced the process and management's review, including: -- The announcement by the Minister of Finance on Sept. 19, 2005, of his request that the Department of National Revenue postpone providing advance rulings respecting flow-through entity structures; -- The Minister of Finance's announcement on Nov. 23, 2005, of a reduction in personal income taxes on dividends, to level the playing field between corporations and income trusts; and -- The announcement by S&P/TSX on May 18, 2005 that "paper- clipped securities", such as income deposit securities, would not be included in the S&P/TSX Composite Index when income trusts were added to the index. In the context of meeting these objectives and responding to the various regulatory developments, Cinram's Board of Directors evaluated several alternative structures including an income trust, income deposit security and high dividend yielding common share. The Board of Directors has unanimously concluded that the income trust conversion has the greatest potential to enhance shareholder value. Among the factors considered by the Board in arriving at its determination were Cinram's ability to maintain its inclusion in the S&P/TSX Composite Index and the expectation that distributions will be treated as dividend income for Canadian income tax purposes. "We anticipate paying initial annualized distributions of US$2.62 per unit, payable in Canadian dollars at approximately C$3.00 per unit," Lewis Ritchie, Chief Financial Officer added. "Based on this level of distributions and our fiscal 2005 reported operating performance, we estimate that Cinram would have retained approximately US$120 million for annual capital expenditures and US$35 million in other discretionary reserves, which compares to our total cash capital expenditures of US$99.8 million for the fiscal year ended Dec.31, 2005." "We believe this capital structure and distribution policy will allow Cinram flexibility to fund operating requirements and growth opportunities while distributing an attractive amount of cash to unitholders at approximately an 81% payout ratio. We will continue to evaluate Cinram's distribution policy from time to time." Financial Advisor Genuity Capital Markets is acting as exclusive financial advisor to the Board of Directors on the proposed Conversion and presented its Fairness Opinion in respect of the Conversion to the Board. The Fairness Opinion provides that, subject to review of the final form of documents in relation to the Conversion and assuming the Conversion proceeds on the terms currently contemplated, the consideration to be received by Cinram shareholders upon the completion of the Conversion is fair from a financial point of view. Process and Approvals The Conversion is subject to a number of conditions, including, but not limited to, the approval of the Ontario Superior Court of Justice and the approval of the shareholders of Cinram. Cinram will seek an interim order from the Ontario Superior Court of Justice for declarations and directions in relation to the plan of arrangement. Cinram will then convene a special meeting of shareholders to consider if and, if deemed appropriate, approve the Conversion, with the meeting expected to be held in late-April 2006. If approved by the shareholders of Cinram, a final order approving the plan of arrangement will be sought from the Court. Although the timing of the completion of the Conversion process cannot be predicted with certainty, Management anticipates that the Conversion will be completed by early-May 2006. There can be no assurance at this time that all approvals and consents required or desirable to effect the Conversion will be obtained within that time frame, or at all and, accordingly, there can be no assurance that the Conversion will be completed. About Cinram Cinram International Inc. -- http://www.cinram.com/-- is the world's largest independent provider of pre-recorded multimedia products and related logistics services. With facilities in North America and Europe, Cinram manufactures and distributes pre- recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and CD-ROMs for motion picture studios, music labels, publishers and computer software companies around the world. The Company's shares are listed on the Toronto Stock Exchange (CRW) and are included in the S&P/TSX Composite Index. * * * As reported in the Troubled Company Reporter on Mar. 7, 2006, Standard & Poor's Ratings Services placed its 'BB' long-term corporate credit and bank loan ratings on prerecorded multimedia manufacturer Cinram International Inc. on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Nov. 8, 2005, Moody's Investors Service placed Cinram International Inc.'s Ba3 Corporate Family and Ba3 Senior Secured ratings under review direction uncertain. The review is prompted by the company's announcement that it plans to pursue a recapitalization as an income deposit security structure. CIT HOME: S&P Downgrades Class BF Loan's Rating to BB from BBB -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class BF from CIT Home Equity Loan Trust 2002-1 to 'BB' from 'BBB' and placed it on CreditWatch with negative implications. At the same time, the ratings on 10 other classes from this transaction are affirmed. The lowered rating and CreditWatch placement are due to monthly realized losses that have exceeded monthly excess spread on a regular basis. This has caused overcollateralization to fall below its target ($4.97 million currently versus a target of $6.131 million). In addition, loss projections show that this trend could continue and further erode credit support to this class. As of the January 2006 distribution date, cumulative losses were 2.90% of the original pool balance. Also, delinquencies were 27.99% of the current pool balance, and 90-plus day delinquencies were 17.57%. Standard & Poor's will closely monitor the performance of this transaction. If monthly realized losses decline to a point where they no longer outpace monthly excess interest, and the level of overcollateralization has not been further eroded, the rating on this class will be affirmed and removed from CreditWatch. Conversely, if losses continue to outpace excess interest, and the level of overcollateralization continues to decline Standard & Poor's will take further negative rating actions. Despite poor collateral performance, the affirmations on the ratings on the 10 remaining classes from this transaction reflect adequate actual and projected credit support provided by: * subordination, * excess interest, and * overcollateralization. The underlying collateral for this transaction originally consisted of subprime fixed- and adjustable-rate first and second liens on owner-occupied one- to four-family residences. Rating lowered and placed on creditwatch negative: CIT Home Equity Loan Trust 2002-1 Rating Class To From ----- -- ---- BF BB/Watch Neg BBB Ratings affirmed: CIT Home Equity Loan Trust 2002-1 Class Rating ----- ------ AF-4,AF-5 AAA AF-6,AF-7,AV AAA MV-1 AA+ MF-1, AA MF-2,MV-2 A BV BBB CLECO CORP: Gets Court Nod to End Power Purchase Deal with Calpine ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved a request giving Acadia Power Partners LLC, a joint venture between subsidiaries of Cleco Corp. (NYSE:CNL) and Calpine Corp., the right to remarket the output of its 1,160-megawatt plant. In addition, the Court approved the mutual termination of a power purchase agreement between Cleco's utility, Cleco Power LLC, and Calpine Energy Services, L.P. The agreement called for CES to supply Cleco Power 200 megawatts through the end of 2006. "We've already signed agreements to ensure Cleco Power will have a reliable supply of electricity to meet our customers' needs," Cleco Corp. President and CEO Michael Madison said. The Court's actions stemmed from CES' request to reject its tolling agreements for the output of the Acadia Power Partners' plant. CES asked to reject the Acadia tolling agreements the day after Calpine, CES and other Calpine subsidiaries filed for Chapter 11 bankruptcy protection in December 2005. CES' request to reject the tolling agreements is still pending. CES stopped making payments to APP under the tolling agreements after it filed for bankruptcy. APP filed a motion asking the Bankruptcy Court to approve a waiver of CES' exclusive rights under the tolling agreements to sell the output of the Acadia plant so APP could start remarketing the plant's power. The Court also accepted a stipulation by Cleco Power and CES to terminate the remainder of the one-year 200-megawatt contract. The contract required CES to provide power from the Acadia plant, which is located just south of Eunice. With APP's request to take over marketing Acadia's output, CES would have been unable to satisfy its Cleco Power contract because it would no longer have rights to power produced by the Acadia plant. APP is preparing to market the plant's output on a short-term basis while continuing to explore its long-term options. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. About Cleco Corp. Headquartered in Pineville, Louisiana, Cleco Corp. -- http://www.cleco.com/-- is a regional energy provider, which operates a regulated electric utility company that serves about 267,000 customers across the state. Cleco also operates a wholesale energy business that has approximately 1,350 megawatts of generating capacity. On March 24, 2003, Moody's Investors Service assigned a Ba2 rating to Cleco Corp.'s Preferred Stock. COLLINS & AIKMAN: Wants Northern Trust to Turn Over Trust Assets ---------------------------------------------------------------- Prior to the Petition Date, Collins & Aikman Corporation and its debtor-affiliates entered into an agreement with Trust Services of America to establish a trust to hold assets for funding the Debtors' retirement liabilities. Specifically, the Trust was created for the purpose of paying supplemental retirement benefits to six former executives of Wickes Companies, Inc., which is now operating as Collins & Aikman Products Co. Northern Trust Bank of California N.A. subsequently became the successor trustee of the Wickes Rabbi Trust. Pursuant to the trust agreement controlling the Wickes Rabbi Trust, the trust assets held in the Wickes Rabbi Trust are available for distribution to the Debtors' creditors. Northern Trust has informed the Debtors that it will only transfer the Trust Assets to the Debtors pursuant to an order by a "court of competent jurisdiction" to turnover the property. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Middle District of Florida to require the Northern Trust to turnover the Trust Assets. The Debtors assert that pursuant to the Trust Agreement and Section 542 of the Bankruptcy Code, the Trust Assets are property of the Debtors' estates and Northern Trust is required to deliver the Trust Assets to them. The Debtors also want Northern Trust to provide an accounting with respect to the Trust Assets under Section 542. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Objects to Kimsworth Payment Request ------------------------------------------------------ Collins & Aikman Corporation and its debtor-affiliates object to Kimsworth, Inc.'s request to compel their payment of administrative expense worth: * $5,507 for unpaid monthly rent; and * $32,514 for unpaid taxes. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, contends that any attempt to disguise prepetition taxes as the equivalent of monthly rent paid in advance to find that prepetition taxes provide the same postpetition benefit is unconvincing. Courts have consistently held that taxes that accrue over the course of the year represent payment for past, not present or future, services provided to a lessee. Kimsworth, Inc., attempts to receive better treatment for the taxes than the treatment received by all other unsecured, prepetition creditors -- in direct violation of the well-settled policy of equality of distribution among similarly situated creditors embodied in the Bankruptcy Code. Mr. Schrock says courts have consistently stated that a central policy of the Bankruptcy Code is equality of distribution to like-situated creditors. Mr. Schrock points out that not only does Kimsworth seek to gain a windfall at the expense of its fellow unsecured, prepetition creditors, but it also seeks to gain a windfall over certain of its fellow lessors. Kimsworth sought to have the priority of an entire tax claim hinge on the date a lessor decides to seek reimbursement of the claim regardless of when it actually arose. This approach would allow Kimsworth to receive full and current payment for its prepetition claims, while any lessor who was unlucky enough to be party to a lease under which the Debtors pay taxes directly to taxing authorities would receive no favored treatment. Pursuant to the terms of the Lease, Kimsworth has complete control of when to seek reimbursement of any taxes. Having paid the Taxes on May 5, 2005, Kimsworth had full opportunity to seek payment prepetition, but instead waited until after the Petition Date to seek reimbursement for the Taxes. Mr. Schrock contends that elevating Kimsworth's claim to administrative expense status under these circumstances is clearly unfair to other unsecured, prepetition creditors and lessors. The Official Committee of Unsecured Creditors agrees with the Debtors' arguments. As reported in the Troubled Company Reporter on Jan. 26, 2006, Kimsworth leased a property at 6950 North Academy Blvd., in Colorado Springs, Colorado, to Collins & Aikman Corporation. Pursuant to the Lease, the Debtors were required to pay rent for $33,333, and real property taxes. The Lease was rejected effective as of June 23, 2005. Robert K. Siegel, Esq., at Jacob & Weingarten, P.C., in Troy, Michigan, told Judge Rhodes that the Debtors have not complied with their obligations to Kimsworth because they did not pay all required monthly rent and taxes arising from the Petition Date until the rejection of the Lease. Specifically, the Debtors did not pay any of the monthly rent, which became due on June 1, 2005, Mr. Siegel explains. The Debtors' subtenant paid to Kimsworth all but $5,507 of the monthly rent, Mr. Siegel added. Taxes for $32,514 also became due on June 14, 2005, when Kimsworth sent a bill to the Debtors demanding payment. The Debtors, however, refused to pay any of the Taxes. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) CONGOLEUM CORP: Posts $6.9 Mil. Net Loss in 4th Qtr. Ended Dec. 31 ------------------------------------------------------------------ Congoleum Corporation (AMEX:CGM) reported its financial results for the fourth quarter and full year ended Dec. 31, 2005. The company reported a $6,950,000 net loss on $61,381,000 of net sales for the three months ended Dec. 31, 2005. The 2005 results include $25.3 million in charges related to asbestos liabilities, of which $15.5 million were recorded in the second quarter of 2005 and $9.9 million were recorded in the fourth quarter of 2005. This compares to $5.0 million in charges to resolve asbestos liabilities in 2004. "It is unfortunate that the intense litigation surrounding our asbestos situation and reorganization process has greatly increased the time and cost needed to put these problems behind us," Roger S. Marcus, Chairman of the Board, commented. "However, I am very encouraged by our latest plan, which we are currently preparing and will soon file with the Bankruptcy Court. We believe this plan will eliminate issues that were the basis of objections by opponents of prior plans." "I'm optimistic that we will receive the requisite consents to confirm this plan in 2006, and that the charge in the fourth quarter, together with existing reserves, will be adequate to cover costs through the confirmation date." Sales for the year ended Dec. 31, 2005, were $237.6 million, an increase of 3.5% compared to the $229.5 million reported in 2004. The net loss for 2005 was $21.6 million after charges for asbestos liabilities, compared with net income of $2.9 million in 2004 after charges for asbestos liabilities. Without the charges for asbestos liabilities, net income before taxes would have been $1.2 million in 2005 and $5.4 million in 2004. "Without the asbestos related charges, our operations generated a pre-tax profit of $1.2 million last year, which I consider a major accomplishment in light of the extraordinary increases we experienced in the cost of raw materials and utilities," Mr. Marcus commented. "We aggressively pursued alternative raw material sources to help control costs and assure continuity of supply, and while this program was successful in accomplishing those objectives, the disruption of changing materials and formulas hurt our manufacturing efficiency until the trials were completed." "While we instituted several selling price increases in response to soaring material prices, the time lag was such that we were unable to recover a significant portion of the additional costs we incurred." "Despite these challenges, our operating results were positive. We grew our sales through both pricing and volume, including a strong performance in the manufactured housing market." Our manufacturing efficiency improved over 2004 despite the negative impact of qualifying new raw materials. Finally, we continued to implement further cost reductions in operating expenses." "At this point, I am cautiously optimistic about our performance in 2006," Mr. Marcus continued. We have just introduced an entirely new sheet flooring product called "K-Tech" which targets the kitchen remodeling market." "While it is too early to judge the results, it has been well received and we are positioning it to maximize incremental sales opportunities." The demand outlook from the manufactured housing industry also appears very encouraging. Our manufacturing efficiency continues to improve, and we should not face the same need to qualify new materials in 2006." "Hopefully the raw material situation has stabilized and our selling price increases will recoup a greater portion of our added costs this year. Based on all this, I'm hopeful that 2006 will be a better year than 2005." About Congoleum Corporation Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors in their restructuring efforts. Elihu Insulbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Claimants' Committee. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Orrick, Herrington & Sutcliffe LLP. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Bondholders. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At Dec. 31, 2005, Congoleum Corporation's balance sheet showed a $44,960,000 stockholders' deficit compared to a $35,614,000 deficit at Sept. 30, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX: ABL). CREDIT SUISSE: Low Bond Credit Levels Cue Moody's Rating Review --------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade eight classes of subordinated tranches from four mortgage backed securitizations issued by Credit Suisse First Boston Mortgage Securities Corp., in 2001. The pools include subprime and Jumbo-A/Alternative-A first-lien fixed and adjustable-rate mortgage loans. The actions are based on the fact that the bonds' current credit enhancement levels, including excess spread where applicable, are low compared to the current projected loss numbers for the current rating level. Rating actions: * Series 2001-HE17; Class M-1, current rating Aa2, under review for possible downgrade * Series 2001-HE17; Class M-2, current rating Ba1, under review for possible downgrade * Series 2001-HE17; Class B, current rating Caa3, under review for possible downgrade * Series 2001-HE25; Class B, current rating Ba2, under review for possible downgrade * Series 2001-HE30; Class B, current rating Ba2, under review for possible downgrade * Series 2001-HE30; Class B-F, current rating Ba3, under review for possible downgrade * Series 2001-11; Class C-B-3, current rating A2, under review for possible downgrade * Series 2001-11; Class C-B-4, current rating Ba2, under review for possible downgrade CREDIT SUISSE: Moody's Holds Junked $6 Mil. Class P Cert. Rating ---------------------------------------------------------------- Moody's Investors Service upgraded the rating of five classes and affirmed the ratings of 14 classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2002-CKS4: * Class A-1, $211,006,789, Fixed, affirmed at Aaa * Class A-2, $708,445,000, Fixed, affirmed at Aaa * Class A-X, Notional, affirmed at Aaa * Class A-SP, Notional, affirmed at Aaa * Class B, $46,072,000, Fixed, upgraded to Aaa from Aa2 * Class C, $18,429,000, Fixed, upgraded to Aa1 from Aa3 * Class D, $30,714,000, Fixed, upgraded to A1 from A2 * Class E, $16,893,000, Fixed, upgraded to A2 from A3 * Class F, $19,965,000, WAC Cap, affirmed at Baa1 * Class G, $15,357,000, WAC Cap, affirmed at Baa2 * Class H, $13,822,000, WAC Cap, affirmed at Baa3 * Class J, $26,107,000, Fixed, affirmed at Ba1 * Class K, $10,750,000, Fixed, affirmed at Ba2 * Class L, $7,679,000, Fixed, affirmed at Ba3 * Class M, $12,285,000, Fixed, affirmed at B1 * Class N, $6,143,000, Fixed, affirmed at B2 * Class O, $6,143,000, Fixed, affirmed at B3 * Class P, $6,143,000, Fixed, affirmed at Caa2 * Class APM, $4,688,562, Fixed, upgraded to Baa2 from Baa3 As of the March 17, 2006 distribution date, the transaction's aggregate principal balance has decreased by 4.7% to $1.18 billion from $1.23 billion at securitization. The Certificates are collateralized by 156 loans, ranging in size from less than 1.0% to 8.6% of the pool, with the top ten loans representing 36.8% of the pool. The pool includes two shadow rated investment grade loans, which comprise 15.1% of the pool. Four loans, representing 3.5% of the pool, have defeased and are collateralized by U.S. Government securities. One loan has been liquidated from the pool resulting in a realized loss of approximately $100,000. Five loans, representing 1.1% of the pool, are in special servicing. Moody's has estimated aggregate losses of approximately $4.6 million for all of the specially serviced loans. Twenty-four loans, representing 11.6% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 operating results for 93.9% of the performing loans, excluding the defeased loans, and partial year 2005 operating results for 75.5% of the performing loans. Moody's weighted average loan to value ratio for the conduit component is 87.2%, essentially the same as at securitization. Moody's is upgrading Classes B, C, D and E due to stable overall pool performance and increased credit support. Moody's is upgrading Class APM due to the improved performance of the Arbor Place Mall Loan. The largest shadow rated loan is the Crystal Mall Loan, which is secured by an 800,000 square foot regional mall located in Waterford, Connecticut. The property is the dominant mall in its trade area and is anchored by Sears, Macy's, Filene's and J.C. Penney. Inline occupancy is 88.6%, compared to 90.7% at securitization. Performance has been stable since securitization. The loan sponsors are Simon Property Group and Mayflower Realty, LLC. Moody's current shadow rating is Baa2, compared to Baa3 at securitization. The second largest shadow rated loan is the Arbor Place Mall Loan, which is the senior portion of a $76.3 mortgage loan. The $4.7 million B Note is included in the pool and is the security for non-pooled Class APM. The loan is secured by a 1.0 million square foot regional mall located in Douglasville, Georgia, approximately 22 miles west of Atlanta. The mall is anchored by Dillard's, Parisian, Macy's, Sears, and J.C. Penney. Inline occupancy has increased to 97.0% from 89.1% at securitization. The loan sponsor is CBL & Associates Properties. Moody's current shadow ratings of the senior and B notes are Baa1 and Baa2 respectively, compared to Baa2 and Baa3 at securitization. The top three conduit loans represent 10.7% of the pool. The largest conduit loan is the SummitWoods Crossing Loan, which is secured by 410,000 square foot retail center located in Lee's Summit, Missouri. The property is 100.0% leased, the same as at securitization. Major tenants include Target and Lowe's Home Centers. Property performance has been stable since securitization. Moody's LTV is 94.7%, compared to 96.2% at securitization. The second largest conduit loan is the 1650 Arch Street Loan, which is secured by a 590,000 square foot Class A office building located in downtown Philadelphia, Pennsylvania. The property is 99.1% occupied, essentially the same as at securitization. The largest tenants are the Environmental Protection Agency and Wolf, Block, Schorr and Solis-Cohen. Performance has been stable since securitization. Moody's LTV is 79.8%, compared to 82.1% at securitization. The third largest conduit loan is the Old Hickory Mall Loan, which is secured by a 555,000 square foot regional mall located in Jackson, Tennessee. The anchor tenants are Macy's, Sears, Belk and J.C. Penney. Inline occupancy is 88.7%, compared to 93.7% at securitization. Performance has been stable since securitization. The loan sponsor is CBL & Associates Properties, Inc. Moody's LTV is 76.1%, essentially the same as at securitization. The pool's collateral is a mix of retail, multifamily, office and mixed use, U.S. Government securities, industrial and self storage and lodging. The collateral properties are located in 34 states. The highest state concentrations are Texas, California, Connecticut, Georgia, and Virginia. All of the loans are fixed rate. DANA CORP: To Pay $78.5 Million Shippers and Warehousemen Claims ---------------------------------------------------------------- Dana Corporation and its debtor-affiliates operate 70 domestic manufacturing facilities that manufacture highly specified metal components, parts and systems. In the operation of their businesses, certain parties with commercial relationships with the Debtors have the ability to and do obtain liens on and interests in the Debtors' property, including in some cases a right to possession of the Debtors' property. The Lienholders include: (1) foreign and domestic commercial common carriers, shippers, freight forwarders, distributors and other third-party service providers who transport goods before, during and after the manufacturing process; (2) owners of warehouses facilities, used by the Debtors to supplement their own on-site storage facilities by storing finished products or raw materials and supplies used in their manufacturing operations; (3) customs brokers and freight forwarders who provide services that enable the Debtors to comply with the complex customs laws and regulations of the United States and other jurisdictions; (4) suppliers of a variety of goods, mostly component parts, produced using tooling and other equipment owned by the Debtors and, at times, using the Debtors' proprietary technology and trade secrets; (5) parties providing services, including coating, cleaning, painting, machining and annealing on the Debtors' goods; and (6) third party artisans who repair or modify machinery and equipment, including tooling, that are no longer fully operational, require routine maintenance or require modification. As of the Petition Date, the Lienholders held outstanding claims for prepetition services and goods provided to the Debtors: Lienholder Prepetition Claim ---------- ----------------- Shippers and Warehousemen $3,400,000 Customs Brokers 1,100,000 Artisans 1,000,000 Outside Producers and Processors 73,000,000 Pursuant to Sections 105(a), 363(b) and 364(b) of the Bankruptcy Code, the Debtors seek authority from the U.S. Bankruptcy Court for the Southern District of New York to pay, in the ordinary course of business, the prepetition secured claims of the Lienholders. The Debtors also ask the Court to direct all banks to honor all checks and transfers made on account of the Lienholder Claims. Corinne Ball, Esq., at Jones Day, in New York, explains that nearly all of the Debtors' facilities -- as is the case throughout the Debtors' industry -- maintain an integrated manufacturing system designed to ensure that the Debtors receive goods on a "just in time" basis. Although coordinated just-in-time supply systems produce important cost savings for the Debtors and their original equipment manufacturing customers in a number of ways, they also place an emphasis on maintaining a continuous and timely supply chain. Under the just-in-time model, even small disruptions in the supply chain have significant and costly ripple effects. Many, if not all, of the Lienholders provide critical goods or services to the operation of the Debtors' just-in-time supply chain, Ms. Ball tells the Honorable Burton R. Lifland. A disruption in the supply chain would have a potentially devastating effect on the Debtors' businesses to the detriment of all stakeholders. Moreover, because the amount of most of the Lienholder Claims are for less than the value of any property securing those claims, it appears that most of the Lienholders are fully secured creditors. In general, pursuant to Section 506, fully secured creditors are entitled to receive (a) payment in full of their prepetition claims and (b) the postpetition interest accruing on the claims up to the value of the collateral. Conditions on Payment of Lienholder Claims The Debtors will require each recipient of a Lienholder Claim payment, to the extent applicable, to: (a) continue to extend normalized trade credit and provide other business terms on a postpetition basis, on terms at least as favorable as those extended prepetition or on other terms that are acceptable to the Debtors, until they emerge from Chapter 11; (b) not file of record in any jurisdiction, or otherwise assert against the Debtors, their Chapter 11 estates or against any of their property, a lien or security interest relating in any manner to the Lienholder Claims; and (c) release to the Debtors, as requested, goods or other assets of the Debtors in the Lienholder's possession. If a Lienholder accepts a Lienholder Payment and fails to provide the Debtors with the requisite Trade Terms, then: (1) any Lienholder Payment received by the Lienholder will be deemed an unauthorized postpetition transfer under Section 549 that the Debtors may either (i) recover from the Lienholder in cash or goods, or (ii) apply against any outstanding administrative claim held by the Lienholder; (2) upon recovery of any Lienholder Payment, the corresponding prepetition claim of the Lienholder will be reinstated in the amount recovered by the Debtors, less the Debtors' reasonable costs to recover the amounts; (3) the Debtors will have rights to challenge the validity, priority or extent of the Lienholders' lien or interest and the validity and amount of the related claim; and (4) the Debtors will have all rights to seek to avoid as fraudulent or preferential or otherwise any lien or interest held by the Lienholder. * * * The Court grants the Debtors' request, subject to modification upon a party-in-interest's request for cause after notice and a hearing. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Flight Attendants Ask Public to Sign Support Petition ---------------------------------------------------------------- On March 24, 2006, 93% of Delta Comair flight attendants voted to authorize a strike. The flight attendants will be asking Sky Miles members to sign a petition protesting the carrier's concessionary demands at LaGuardia Airport, starting today, until Wednesday, March 29, 2006, from 10:00 a.m. to 5:00 p.m. Flight attendants will be gathering at four other airports as well. Delta Comair has demanded pay cuts of approximately $10,880 annually, which is up to 30% of the average Comair flight attendant's salary of $28,000. The cuts would hit Comair working families particularly hard, coming on top of hefty increases in employee health care costs that Comair implemented last year in violation of the flight attendants' contract. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DORAL FINANCIAL: Moody's Cuts Subord. Debt Rating to B2 from B1 --------------------------------------------------------------- Moody's Investors Service downgraded to B1 from Ba3 the senior debt ratings of Doral Financial Corporation, and reiterated the negative rating outlook. Moody's action follows cease and desist orders placed by banking regulators on Doral and some of its subsidiaries, including Doral Bank, San Juan, Puerto Rico. When Moody's last downgraded Doral's debt on Oct. 28, 2005, it issued a negative rating outlook, but noted that any credit deterioration including regulatory consequences or liquidity issues could result in a review for possible downgrade or an outright downgrade. Moody's cited the regulatory action as one of the primary reasons for the downgrade, saying that the company needs to comply under a strict timeframe. Moody's also noted that although the company's near-term liquidity position appears satisfactory, the company is facing a $625 million debt maturity in July 2007 as well as potential regulatory fines and litigation damages from pending proceedings. The downgrade also reflects the risk that Doral could potentially have difficulty funding these obligations in the event of further delays in its financial reporting or a disruption in the capital markets. Although the cease and desist order is a negative development, the rating agency stated that the new management had begun to address many of Doral's credit issues prior to the regulatory action. Moody's added that operating under a regulatory agreement often results in better risk management and tighter controls -- two of the main issues that caused Doral's problems in the first place. According to Moody's, Doral's holding company and its non bank subsidiaries conduct considerable business and generate earnings independent of the regulated bank subsidiaries. The regulatory agreements require, among other conditions, that Doral Bank must obtain prior approval from regulators before paying any dividends to its parent company. To date, however, the holding company has never taken dividends from the lead bank to service holding company obligations. Moreover, Doral, again among other conditions, must obtain regulatory approval before paying dividends to its shareholders, which improves coverage for creditors. Moody's noted the continued strengthening of the management team and corporate governance. The negative rating outlook reflects concern for the long-term funding as well as potential regulatory fines and ongoing litigation risk. Moody's could return the rating outlook to stable once these issues have been sufficiently addressed. The rating agency will monitor closely Doral's regulatory compliance and the potential for any impairment to its franchise as a leader in Puerto Rico's mortgage market, as well as its financial performance relative to like-rated banking institutions. Ratings downgraded include: * Senior debt to B1 from Ba3; and * Subordinated debt to B2 from B1. Doral Financial, headquartered in San Juan, Puerto Rico, reported total assets of approximately $18 billion as Dec. 31, 2004, which is its last filing date. EMERITUS CORP: Dec. 31 Equity Deficit Narrows to $113 Million ------------------------------------------------------------- Emeritus Corp. aka Emeritus Assisted Living filed its financial results for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on Mar. 16, 2006. The company earned $11,703,000 of net income on $387,732,000 of total operating revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $747,770,000 in total assets and $860,843,000 in total liabilities, resulting in a $113,073,000 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $86,111,000 in total current assets available to pay $114,919,000 in total current liabilities coming due within the next 12 months. Full-text copies of Emeritus Corp.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?6de Emeritus Corp aka Emeritus Assisted Living -- http://www.emeritus.com/-- is a national provider of assisted living and related services to seniors. Emeritus is one of the largest developers and operators of freestanding assisted living communities throughout the United States. These communities provide a residential housing alternative for senior citizens who need help with the activities of daily living with an emphasis on assistance with personal care services to provide residents with an opportunity for support in the aging process. Emeritus currently holds interests in 182 communities representing capacity for approximately 18,400 residents in 34 states. Emeritus' equity deficit narrowed to $113,073,000 at Dec. 31, 2005, from a $134,220,000 equity deficit at Sept. 30, 2005. ESCHELON TELECOM: S&P Rates $46 Mil. Sr. 2nd Secured Notes at B- ---------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B-' rating to Eschelon Telecom Inc.'s $46 million 8.375% senior second secured notes due 2010. The notes are a tack-on to the company's original senior second secured notes offering. A portion of the proceeds will be used to fund the acquisition of Oregon Telecom Inc. (OTI). The 'B-' corporate credit rating and stable outlook on Eschelon, a Minneapolis, Minnesota-based competitive local exchange carrier (CLEC), were affirmed. Pro forma total debt is around $143 million. "The ratings reflect a high degree of credit risk stemming from the company's vulnerable business position due primarily to the highly competitive CLEC business," said Standard & Poor's credit analyst Allyn Arden. Additionally, the ratings incorporate integration risk associated with the recent acquisition of OTI, a CLEC serving the Oregon and Washington markets, and Eschelon's modest liquidity. Tempering factors include: * the company's modest leverage; * low churn; and * its flexibility with respect to capital spending. Eschelon provides commodity voice and data services to small and midsize enterprises in 12 major metropolitan markets in the western and Midwestern U.S. The company's total equivalent access line base as of Dec. 31, 2005, totaled 415,000. Its network is linked mainly by owned switches and leased fiber and local loops, and a small portion is based on Qwest Platform Plus, formerly referred to as an unbundled network element-platform. In addition to competing with Qwest, Eschelon serves business customers in approximately 15% of AT&T Inc.'s territories. FACTORY 2-U: Chapter 7 Trustee Taps Recovery Services as Agent -------------------------------------------------------------- Jeoffrey L. Burtch, the Chapter 7 trustee appointed in Factory 2-U Stores, Inc., and its debtor-affiliates' cases, seeks authority from the U.S. Bankruptcy Court for the District of Delaware, to employ Recovery Services Inc., as his collection agent. The Trustee needs RSI's assistance in recovering amounts for the Chapter 7 Estate with respect to default judgments and other judgments entered in adversary proceedings commenced in the Debtors' bankruptcy cases. RSI is a company in the collection industry since 1995. Larry Waslow, the firm's secretary and treasurer, will have primary involvement in the engagement. Mr. Waslow has worked in the collection industry for 36 years, and he and RSI has been employed as a collection agent for other trustees. RSI's standard compensation for work is a 30% contingency rate, net of costs. To the best of the Trustee's knowledge, RSI does not represent any interest adverse to the Trustee or the Chapter 7 estate and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in San Diego, California, Factory 2-U Stores, Inc., -- http://www.factory2-u.com/-- operates a chain of off-price retail apparel and housewares stores in 10 states, mostly in the western and southwestern US. The stores sell branded casual apparel for the family, as well as selected domestics, footwear, and toys and household merchandise. The Company filed for chapter 11 protection on January 13, 2004 (Bankr. Del. Case No. 04-10111). The Court converted the Debtors' case into a chapter 7 proceeding on Jan. 27, 2005, and appointed Jeoffrey L. Burtch as trustee. M. Blake Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their bankruptcy cases. When the Debtors filed for protection from their creditors, they listed $136,485,000 in total assets and $73,536,000 in total debts. The Court appointed Jeoffrey L. Burtch as the Chapter 7 Trustee. Adam Singer, Esq., at Cooch and Taylor represents the Chapter 7 Trustee. FAIRFAX FINANCIAL: Fitch Puts $1.1 Bil. Debts' B+ Ratings on Watch ------------------------------------------------------------------ Fitch placed Fairfax Financial Holdings Limited, Odyssey Re Holdings Corp. and its insurance subsidiaries, and TIG Holdings Inc. on Rating Watch Negative. The rating action on TIG reflects the alignment of TIG's and Fairfax's debt ratings given that Fairfax guarantees TIG's debt. The holding company ratings of: * Crum & Forster Holdings Corp., * the insurance company ratings of Crum & Forster Insurance Group, * Northbridge Financial Insurance Group, and * TIG Insurance Group are not affected by this action. The Negative Rating Watch reflects uncertainty with respect to several recent events, the culmination of which has increased the level of uncertainty beyond Fitch's expectations for the rating. These recent events include: -- Odyssey Re's announcement in February 2006 that they were restating financial results for 2001 to 2004 and the first nine months of 2005 to correct errors related to finite reinsurance contracts; -- Odyssey Re's announcement last week that it would delay its 10-K filing up to 30 days, citing the need for additional time to complete the restatement of its financial results. As a result, Fairfax, which owns 80% of Odyssey Re, has also delayed the filing of its annual report; -- Fairfax's announcement yesterday that the company and its CEO, Prem Watsa, received subpoenas from the Securities and Exchange Commission in connection with an answer to a question on the Feb. 10, 2006 investor conference call concerning the review of the company's finite reinsurance contracts. Fairfax also announced that its independent auditors and a shareholder have received subpoenas from the SEC related to subpoenas issued to Fairfax. Fitch's ratings of Fairfax and its subsidiaries have incorporated a certain amount of risk related to the ultimate potential negative impact of issues surrounding the company's use of finite reinsurance, including the various subpoenas received previously. Fitch currently adjusts the reported results of Fairfax to exclude approximately $750 million of finite benefits from three contracts. However, these recent events have added a heightened level of concern that the financial condition of Fairfax and Odyssey Re could be more stressed than what is currently reflected in their ratings. In addition, there is also the increased risk that the ongoing investigations by the SEC and the U.S. Attorney's office for the Southern District of New York could bring about a civil action against the company. Fitch believes that any such action could negatively impact the company's: * franchise, * reputation, and * competitive position, in addition to the financial impact of any fines and/or penalties levied. Fitch expects to revisit the Negative Rating Watch following a review of Fairfax's annual report and Odyssey's 10-K, when filed, for any significant adjustments to the companies' financial position that have not already been factored into the rating. However, even if the impact of any such restatements is not material, the Negative Rating Watch may continue to be maintained due to the uncertainty surrounding the ongoing investigations. These ratings have been placed on Rating Watch Negative: Fairfax Financial Holdings Limited: -- Issuer Default Rating 'BB-'; -- $62 million unsecured due April 15, 2008 'B+' -- $466 million unsecured due April 15, 2012 'B+' -- $100 million unsecured due Oct. 1, 2015 'B+' -- $190 million unsecured due April 15, 2018 'B+' -- $98 million unsecured due April 15, 2026 'B+' -- $91 million unsecured due July 15, 2037 'B+' -- $96 million convertible due July 15, 2023 'B+' Fairfax, Inc.: -- Issuer Default Rating 'BB-' -- $101 million exchangeable due Nov. 19, 2009 'B+' Odyssey Re Holdings Corp.: -- Issuer Default Rating 'BBB-' -- $50 million series A unsecured March 15, 2021 'BB+' -- $50 million series B unsecured due March 15, 2016 'BB+' -- $40 million unsecured due Nov. 30, 2006 'BB+' -- $80 million convertible due June 15, 2022 'BB+' -- $225 million unsecured due Nov. 1, 2013 'BB+' -- $125 million unsecured due May 1, 2015 'BB+' -- $50 million series A preferred shares 'BB' -- $50 million series B preferred shares 'BB' Odyssey Re Group: Odyssey America Reinsurance Corporation: Clearwater Insurance Company: -- Insurer financial strength 'BBB+' TIG Holdings, Inc.: -- Issuer Default Rating 'BB-' -- TIG Capital Trust I $52 million trust preferred stock due 2027 'B' These ratings remain unchanged by Fitch: Crum & Forster Holdings Corp.: -- Issuer Default Rating 'BB-' -- $300 million unsecured due June 15, 2013 'B+' Crum & Forster Insurance Group: Crum & Forster Insurance Company: Crum & Forster Indemnity Company: The North River Insurance Company: United States Fire Insurance Company: -- Insurer financial strength 'BBB-' Northbridge Financial Insurance Group: Commonwealth Insurance Company: Commonwealth Insurance Company of America: Federated Insurance Company of Canada: Lombard General Insurance Company of Canada: Lombard Insurance Company: Markel Insurance Company of Canada: Zenith Insurance Co. (Canada): -- Insurer financial strength 'BBB' TIG Insurance Group: TIG Indemnity Company: TIG Insurance Company: TIG Specialty Insurance Company: -- Insurer financial strength 'BB+' FASSBERG CONSTRUCTION: Panel Wants to File Competing Reorg. Plan ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Fassberg Construction Company's chapter 11 case asks the U.S. Bankruptcy Court for the Central District of California to terminate the Debtor's exclusive period to solicit acceptances of its chapter 11 plan. The Committee also asks the Court for permission to file a competing chapter 11 plan. The Debtor submitted its chapter 11 plan of reorganization and an accompanying disclosure explaining that plan on Feb 27, 2006. The Committee reminds the Court that a hearing to determine the adequacy of the Debtor's disclosure statement has been set for Apr. 4, 2006. The Committee tells the Court that the Debtor has previously asserted that its primary goal in filing for bankruptcy was to complete certain ongoing construction projects and distribute any profits obtained to creditors. The Committee however says that based on the Debtor's monthly operating reports, the Debtor has not only failed to accumulate any cash during its bankruptcy proceedings but has also not shown that any of the ongoing projects will be completed at a profit. The Committee says that the Debtor has failed to generate value for the benefit of its creditors after nearly a year under chapter 11. The Committee contends that this demonstrates either the projects were ill conceived, mismanaged or both. The Committee says that the Debtor's plan is fatally flawed because: 1. Abraham Fassberg, the owner of the Debtor, will retain control of the Reorganized Company without contributing any new value or providing any assurance the unsecured creditors will receive any distributions; and 2. the Debtor retains non-operating assets for its sole benefit even though these assets are property of the estate and should be preserved for the benefit of creditors. The Committee tells the Court that an alternative chapter 11 plan that preserves and distributes the value of the estate to creditors should also be presented for creditors to vote on. The Committee argues that although creditors may vote "no" on a plan, it is far different from voting "yes" on a fair, equitable and feasible plan. The Committee contends that terminating the Debtor's exclusive right to gain acceptance of its plan benefits both the creditors and the Debtor. The Committee also asks the Court that the hearing on the disclosure statement be continued for 60 days to allow it sufficient time to file it own disclosure statement and plan. Overview of the Debtor's Chapter 11 Plan In its disclosure statement, the Debtor explains its plan will be funded by fees from current projects Fassberg Construction Company is working on. Commencing on the earlier of Apr. 1, 2006, or entry of a Court order approving a proposed agreement between the Debtor and a newly created non-debtor entity named Fassberg Contracting Corporation, Fassberg Contracting will bid all construction work that would otherwise be bid by the Debtor. The Debtor anticipates that the work will be non-bonded. Fassberg Contracting will provide all construction and management related services and will operate on a budget made available to creditors and parties-in- interest. Treatment of Claims Under the Plan, administrative and priority tax claims will be paid in full. Fidelity & Deposit Company of Maryland's secured claims of $32 million will also be paid in full. Abraham & Wendy Fassberg's $1,126,867 unsecured claim will be converted to equity as component of new value. H.A.C.L.A.'s claim totaling $4,847,000, General Construction Cliams totaling $663,476, and Non-construction claims totaling $432,213, will receive a total payout of only 34% of their claims. Distributions will be made on a quarterly basis from Dec. 1, 2006, up to Dec. 31, 2007. Abraham Fassberg, sole owner of the Debtor, will retain 100% of his stock interest in the Debtor. A full text copy of the Debtor's disclosure statement explaining its chapter 11 plan of reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060322232632 Headquartered in Encino, California, Fassberg Construction Company is a full service general contracting and construction management firm specializing in providing high-quality, professional and comprehensive contracting services to the market-rate, affordable, senior and mixed-use housing markets. The Company filed for chapter 11 protection on April 1, 2005 (Bankr. C.D. Calif. Case No. 05-11957). Douglas M. Neistat, Esq., at the Law Offices of Greenberg & Bass, serves as counsel in the Debtor's bankruptcy case. David B Golubchik, Esq., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it had assets of $15,267,175 and debts of $6,758,113. FOAMEX INT'L: Wants Plan Solicitation Period Stretched to Aug. 15 ----------------------------------------------------------------- Section 1121(b) of the Bankruptcy Code provides that only a debtor has the exclusive right to file and solicit acceptances of a Chapter 11 plan of reorganization until 120 days after the Petition Date. Once a debtor has filed a Plan within that exclusive period, no other party-in-interest may propose a plan unless the debtor has failed to obtain acceptances from all classes in its plan within 180 days after the Petition Date. Section 1121(d) provides that, on a timely request of a party-in- interest, and after notice and hearing, the Court may increase the 120-day and the 180-day exclusive periods. Foamex International Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive solicitation period until August 15, 2006, and, to the extent it did not expire by operation of law on January 17, 2006, extend their exclusive period to file a chapter 11 plan through August 15, 2006. The Debtors have worked closely with the ad hoc committee of senior secured noteholders representing more than 50% of the $300,000,000 principal amount of the Debtors' senior secured notes and the Official Committee of Unsecured Creditors. The Plan of Reorganization and Disclosure Statement filed on Dec. 23, 2005, is supported by the Ad Hoc Committee. The Debtors have continued to negotiate with the Creditors' Committee and Steel Partners II, LP, their single largest unsecured creditor, as well as the Ad Hoc Committee, to build a consensus on a fully consensual plan. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, tells the Court that there is still more work to be done before the Plan can be finalized. Ms. Morgan says the Debtors need more time to evaluate: -- the impact of their recent performance, which has exceeded their expectations, on their projections for the remainder of 2006 and beyond; and -- the impact, if any, on the terms of a revised plan. Ms. Morgan asserts that the Debtors are not seeking to extend their Exclusive Periods as a means of forcing creditors into accepting a particular plan. On the contrary, the Debtors intend to use the requested extension to garner support for a revised plan, which will be acceptable to all creditor constituencies with whom they have been negotiating, Ms. Morgan says. The Court will convene a hearing on April 11, 2006, to consider the Debtors' request. By application of Del. Bankr.LR 9006-2, the Debtors' exclusive periods are automatically extended until the conclusion of that hearing. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INT'L: Wants Until July 14 to File Notices of Removal ------------------------------------------------------------ Foamex International Inc., and its debtor-affiliates further ask the U.S. Bankruptcy Court for the District of Delaware to extend the time by which they must file notices of removal with respect to prepetition civil actions until July 14, 2006. The Debtors are parties to various actions currently pending in different state and federal tribunals. Since the Petition Date, the Debtors have been primarily focused on stabilizing their postpetition operations, and negotiating and developing a consensual Plan of Reorganization with their major creditor constituencies. To date, the Debtors have not had adequate time to fully investigate and evaluate all of the Actions to determine whether removal is appropriate, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says. An extension will give the Debtors more time to make fully informed decisions concerning removal of each action and will assure that the Debtors do not forfeit valuable rights, Ms. Morgan asserts. Furthermore, Ms. Morgan says, the rights of the Debtors' adversaries will not be prejudiced by an extension because any party to a prepetition action that is removed may seek to have it remanded to the state court. The Court will convene a hearing on April 11, 2006, to consider the Debtors' request. By application of Del. Bankr.LR 9006-2, the Debtors' removal period is automatically extended until the conclusion of that hearing. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) G+G RETAIL: Otterbourg Steindler Hired as Committee's Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors of G+G Retail, Inc., permission to retain Otterbourg, Steindler, Houston & Rosen, P.C., as its counsel effective as of Feb. 2, 2006. Otterbourg Steindler is expected to: a) assist and advise the Committee in its consultation with the Debtor relative to the administration of the case, including the sale of the Debtor's assets and the Debtor's efforts to obtain DIP financing, including an inventory line of credit; b) attend meetings and negotiate with the representatives of the Debtor; c) assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs; d) assist the Committee in the review, analysis and negotiation of any disclosure statement(s) accompanying any plan(s) of reorganization that may be filed; e) assist the Committee in the review, analysis and negotiation of any financing agreements; f) take all necessary action to protect and preserve the interests of the Committee, including: i) possible prosecution of actions on its behalf, ii) if appropriate, negotiations concerning all litigation in which the Debtor is involved, and iii) if appropriate, review and analysis of claims filed against the Debtor's estate. g) prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; h) appear, as appropriate, before the Court, the Appellate Courts, and the U.S. Trustee, and protect the interests of the Committee before those Courts and before the U.S. Trustee; and i) perform all other necessary legal services in this case. Scott L. Hazan, Esq., a member of Otterbourg Steindler, discloses the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partner/Counsel $490 - $725 Associate $240 - $525 Paralegal/Legal Assistant $125 - $195 Mr. Hazan assures the Court of his firm's disinterestedness as that term is defined in Section 101(14) of the Bankruptcy Code. quartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. G+G RETAIL: Panel Taps Abacus Advisors as Business Consultants -------------------------------------------------------------- The Official Committee of Unsecured Creditors of G+G Retail, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Abacus Advisors Group LLC as its business consultants effective as of Feb. 2, 2006. Abacus Advisors is expected to: a) advise the Committee with respect to offers received for the acquisition of all or parts of the Debtor's business and assets; b) solicit indications of interest from other potential purchasers of the Debtor's businesses and assets; c) review and comment on proposals received for the acquisition of the Debtor's businesses and assets; d) negotiate with potential purchasers on behalf of the Committee; e) attend meeting of the full Committee and any sub-committees; f) attend the auction for the Debtor's businesses and assets; and g) advise the Committee with respect to the most effective process for obtaining the highest and best offer for the Debtor's businesses and assets. Jack Rapp, managing director of Abacus Advisors, says the Firm will charge the Debtor a $150,000 flat fee for its services rendered during this case, plus reimbursement of actual, out-of- pocket expenses incurred by the Firm. To the best of the Committee's knowledge, Abacus Advisors does not hold or represent any interest adverse to the Committee or the Debtor's estate. Headquartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. GALVEX CAPITAL: Committee Taps DLA Piper as Bankruptcy Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Galvex Holdings Limited and its debtor-affiliates' chapter 11 cases asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ DLA Piper Rudnick Gray Cary US LLP as its bankruptcy counsel. DLA Piper will: (a) advise the Committee with respect to its rights, duties and powers in the Debtors' chapter 11 cases; (b) assist and advise the Committee in its consultations with the Debtors relative to the administration of the chapter 11 cases; (c) assist the Committee in its review and analysis of any and all offers to purchase the Debtors' assets and asset purchase agreements; (d) assist the Committee in examining and analyzing the propriety of inter-Debtor agreements; (e) assist and advise the Committee as to whether dismissal of the Debtors' cases is appropriate and in the best interest of creditors; (f) assist the Committee in analyzing the claims of the Debtors' creditors and the Debtors' capital structure and in negotiating with holders of claims and equity interests; (g) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (h) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (i) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in these chapter 11 cases; (j) represent the Committee at all hearings and other proceedings; (k) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety, and to the extent deemed appropriate by the Committee support, join or object thereto; (l) advise and assist the Committee with respect to any legislative, regulatory or governmental activities; (m) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (n) prepare, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the foregoing; (o) investigate and analyze any claims against the Debtor's secured lenders; (p) advise and assist the Committee in its review and analysis of the Debtors' corporate governance; and (q) perform such other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code, Bankruptcy Rules or other applicable law. Thomas R. Califano, Esq., a partner at DLA Piper, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $610 - $650 Special Counsel and Counsel $550 Associates $275 - $485 Paraprofessionals $225 Mr. Califano assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Court. Mr. Califano can be reached at: Thomas R. Califano, Esq. DLA Piper Rudnick Gray Cary US LLP 1251 Avenue of the Americas New York, New York 10020-1104 Tel: (212) 835-6190 Fax: (212) 835-6001 http://www.dlapiper.com/ About Galvex Holdings Limited Headquartered in New York City, New York, Galvex Holdings Limited -- http://www.galvex.com/-- and its affiliates operate the largest independent galvanizing line in Europe. The Debtors have offices in New York, Tallinn, Bermuda, Finland, Ukraine, Germany and the United Kingdom. The company and four of its affiliates filed for chapter 11 protection on Jan. 17, 2006 (Bankr. S.D.N.Y. Case No. 06-10082). David Neier, Esq., and John E. Tardera, Esq., at Winston & Strawn LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. GALVEX HOLDINGS: Bankr. Court Allows Lenders to Replace Directors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York modified the automatic stay in Galvex Holdings Limited and its debtor-affiliates chapter 11 cases, in order to permit Bayerische Hypo-und Vereinsbank Atkiengesellschaft and SPCP Group LLC to: a. carry out or effect any action requested or taken by the directors of Galvex Holdings on Holdings' behalf, or by SPCP Group LLC; b. remove the current members of Galvex Trade's board of directors; and c. appoint in their place any or all of Shepard C. Spink, Antonio Alvarez III, Anthony Baron Rosen, and Maurice Moses. Bayerische acts as the agent for the Debtors' prepetition lenders and secured party under a Letter of Credit Facility (as amended and restated), dated Sept. 22, 2001, while SPCP Group is a lender under that Prepetition Secured Loan. The Court however maintained the provisions of the automatic stay including, without limitation, any act to collect, assess, or recover a claim that arose before the commencement of the Debtors' chapter 11 cases shall remain in full force and effect. The Court also instructed Bayerische to execute and deliver all instruments and documents and take all such other actions as may be necessary or appropriate to implement and effectuate the actions contemplated in the Court's Order. The motion to modify the automatic stay was filed by Galvex Holdings Ltd., Galvex Estonia and Galvex Intertrade, all debtors, as an alternative should the Court not dismiss their respective chapter 11 cases. Forced Bankruptcy Filing The Debtors told the Court that their bankruptcy proceedings were commenced at the direction of one non-debtor third party solely to increase that party's leverage in a dispute with a second non- debtor third party over the control of Galvex. The Debtors contended that their chapter 11 cases were not filed to protect Galvex's going-concern value or to preserve the value of the Galvex Debtors' estates for the benefit of their creditors. The Debtors disclosed that prior to the commencement of their chapter 11 cases, they were generally paying their operating debts as they came due. The Debtors say that as result of the chapter 11 filings, they are subject to all of the unnecessary costs and limitations imposed by chapter 11, but Galvex does not require and cannot reap any of the advantages of the filings. The Debtors told the Court that their chapter 11 cases should be dismissed citing: 1. the chapter 11 cases were not properly authorized; 2. the chapter 11 cases will diminish their estates and provide no path to rehabilitation; and 3. the totality of the circumstances. Galvex Capital Not Included The Debtors tell the Court that although they want their chapter 11 cases dismissed, they did not seek to also dismiss Galvex Capital, LLC's chapter 11 case. The Debtors say that Galvex Estonia, Galvex Intertrade, and Galvex Trade are wholly-owned direct subsidiaries of Galvex Holdings but Galvex Capital is an unrelated debtor. A copy of the Debtors organization chart is available for free at http://ResearchArchives.com/t/s?6d6 Modify Automatic Stay Should the Court not dismiss their respective chapter 11 cases, the Debtors ask that the temporary restraining order and automatic stay be modified. The Debtors reminds the Court that under Bermudian law, only a registered shareholder may replace a board of directors. The Debtors say that although Galvex Holdings is the beneficial shareholder of Galvex Trade, Bayerische is the registered shareholder, and thus is the only one authorized to replace the directors of Galvex Trade. The Debtors say that prior to the event of default under the Credit Facility, Galvex Holdings had the ability to direct Bayerische to change the directors of Galvex Trade. Subsequent to the default, the Debtors relates, SPCP Group also had that ability. Bayerische however had been unwilling to take action for fear that it would violate the TRO or automatic stay. The Debtors say that was intended for Bayerische in order to prohibit Bayerische from utilizing SPCP Group's collateral which was Galvex Holdings equity interest in Galvex Trade. About Galvex Holdings Headquartered in New York City, New York, Galvex Holdings Limited -- http://www.galvex.com/-- and its affiliates operate the largest independent galvanizing line in Europe. The Debtors have offices in New York, Tallinn, Bermuda, Finland, Ukraine, Germany and the United Kingdom. The company and four of its affiliates filed for chapter 11 protection on Jan. 17, 2006 (Bankr. S.D.N.Y. Case No. 06-10082). David Neier, Esq., at Winston & Strawn LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. GARDENBURGER INC: Court Confirms Reorganization Plan ---------------------------------------------------- The Hon. James N. Barr of the U.S. Bankruptcy Court for the Central District of California in Santa Ana confirmed Gardenburger, Inc.'s Plan of Reorganization on March 15, 2006. Gardenburger will exit bankruptcy protection as a private company and will be reincorporated as Wholesome & Hearty Foods Company. As reported in the Troubled Company Reporter on Feb. 10, 2006, holders of General unsecured claims will be paid in full in three installments: -- 25% of the allowed claim six months after the effective date; -- 25% of the allowed claims 12 months after the effective date, and -- the remaining 50%, 18 months after the effective date. Unsecured creditors will not receive any payment for interest accruing on their claims after the petition date. Annex Holdings, which currently holds the Debtor's Convertible Senior Subordinated Note, will receive new equity interests in the Reorganized Debtor on the effective date of the Plan. The new equity due to the holder of the Convertible Note will constitute all of the New Preferred Stock issued under the Plan and 83% of the New Common Stock issued or reserved for issuance under the Plan. Warehouseman Claims will be treated in accordance with the Warehouseman agreements. Holders of Preferred Shareholder Claims, Common Shareholders Claims and Equity Interest Related Claims won't get anything under the Plan. Plan Funding Payments due under the Plan will be funded from the Reorganized Debtor's operating revenues and the Exit Financing provided by Wells Fargo Bank, National Association and GB Retail Funding, LLC. On the effective date of the Plan, the DIP credit facilities extended by Wells Fargo and GB Retail will be replaced with the exit facility, maturing on Nov. 22, 2008. Wells Fargo and GB Retail's liens under the DIP facilities will remain in full force and effect and will continue unaltered. The Wells Fargo credit facility provides for a secured revolving line of credit of up to $7.5 million and a secured equipment term loan of $2.2 million. All advances under the facility are secured by first priority security interests in the Reorganized Debtors assets. The credit facility carries interest at the Prime Rate plus 0.50% per annum floating. The GB Retail credit facility consists of a $5 million secured single-advance term loan. GB Retail holds a second priority lien on all collateral securing Wells Fargo's credit facility and a first priority perfected security interest in all of the Reorganized Debtor's general intangible assets. The interest rate on the GB Credit Facility is the Prime Rate plus 6.75% per annum floating. A full text copy of the order confirming the Debtor's Plan is available for free at http://researcharchives.com/t/s?6e4 Headquartered in Los Angeles, California, Gardenburger, Inc. -- http://www.gardenburger.com/-- makes original veggie burgers and innovates in meatless, 100% natural, low-fat food products. The company distributes its meatless products to more than 35,000 foodservice outlets throughout the United States and Canada. Retail customers include more than 30,000 grocery, natural food and club stores. The company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. C.D. Calif. Case No. 05-19539). David S. Kupetz, Esq., at SulmeyerKupetz, represent the Debtor in its restructuring efforts. Marc J. Winthrop, Esq., Robert E. Opera, Esq., Sean A. O'Keefe, Esq., and Paul J. Couchot, Esq., at Winthrop Couchot, P.C., represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $21,379,886 in assets and $39,338,646 in debts. GARDENA CITY: Moody's Places Ba2 Rating on Watch and May Upgrade ---------------------------------------------------------------- Moody's placed on Watchlist for possible upgrade the Ba2 rating on the 1994 Gardena Public Improvement Corporation Refunding Certificates of Participation currently outstanding in the approximate amount of $3.6 million. The Watchlist action results from the agreement in principle between the city and its two letter of credit banks addressing approximately $26 million owed to the banks. Moody's evaluation of the city's rating will focus on the fiscal implications of that agreement. More specifically, Moody's expect to review the structure of the city's upcoming COPs which are being proposed partially to address its obligation to the banks, the city's remaining liability to the banks over the next several years, and the city's current and projected financial position. GENERAL MOTORS: Kohlberg Kravis Buys GMAC Stake for $9 Billion -------------------------------------------------------------- An investor group led by affiliates of Kohlberg Kravis Roberts & Co., Five Mile Capital Partners, LLC, and Goldman Sachs Capital Partners completed the acquisition of a majority interest in GMAC Commercial Holding Corp. from General Motors Acceptance Corporation. GMAC, the wholly owned financial services subsidiary of General Motors Corporation, sold 78% of its equity in GMACCH, up from the previously announced 60% target, in exchange for more than $1.5 billion in cash. At the closing, GMACCH also repaid to GMAC approximately $7.3 billion of inter-company loans, bringing GMAC's total cash proceeds from the transaction to almost $9 billion. GMACCH, a leader in real estate finance, investments and services announced that it changed its name to Capmark Financial Group Inc. The name change will be fully implemented in the second quarter of this year. Simultaneous with the equity interest sale, Capmark closed with a syndicate of banks on a $10.75 billion loan facility that will provide the company with a solid intermediate and long-term debt- funding base. "This is an exciting time for our company, and we have a great deal to celebrate," said Capmark Chief Executive Officer Robert D. Feller. "With investment-grade ratings from the three primary rating agencies and enhanced access to the capital markets, Capmark is poised to fully realize the opportunities that exist for each of its businesses." GMAC Chairman Eric A. Feldstein said, "GMAC is optimistic about the growth prospects for Capmark. With improved access to cost- efficient funding, this commercial mortgage business should continue to thrive. We are expecting strong returns on the significant investment that GMAC will retain in this business. At the same time, this transaction will enable GMAC to redeploy a significant amount of capital - almost $9 billion - to other critical areas of our business." Concurrent with the closing of the sale, the percentage of ownership interest of both the investor group and GMAC was reduced proportionately by the sale of shares to members of Capmark's management team, who have acquired an equity stake of approximately 4%. With the management team's investment, the investor group holds a majority interest of approximately 75%, while GMAC retains a common equity stake of approximately 21%. GMAC also will invest an additional $250 million in Capmark trust preferred stock. Capmark's board of directors will be led by newly appointed independent Chairman Dennis Dammerman, a former vice chairman of General Electric and chairman and chief executive officer of GE Capital Corp. GMAC will hold two seats on Capmark's 15-member board, which includes three independent directors. "I am very pleased to serve as chairman of the board of directors of Capmark," said Mr. Dammerman. "With increased access to capital, a new name and investment-grade ratings, the company can build on its many strengths, drive profitability and enhance the value of the enterprise." KKR, Five Mile Capital Partners and Goldman Sachs Capital Partners said in a joint statement, "As a global leader in each of its businesses, Capmark is very well positioned to begin its next chapter as a standalone company. We look forward to working with the management team to realize the company's full potential by making use of the wide range of funding options now available to Capmark." About Capmark Capmark Financial Group Inc. -- http://www.gmaccm.com/-- is an industry leader in real estate finance, investments and services. Capmark's real estate lending and origination platform has access to multiple capital sources. The company is a direct lender, a correspondent for life insurance companies and pension funds and one of the leading approved lenders for FHA, Fannie Mae and Freddie Mac. In 2005, Capmark's originations were $29.9 billion. Capmark's funds and investment management platform is a highly respected manager of equity real estate and mortgage-related investments in the public and private markets with $10.8 billion in investments under management and supervision. With a portfolio of approximately $276 billion, Capmark is one of the industry's leading loan servicers. The diverse real estate finance, investments and services company has more than 100 offices and operations in North American, Asia and Europe. For more information, visit About KKR KKR - http://www.kkr.com--- is one of the world's oldest and most experienced private equity firms specializing in management buyouts. Founded in 1976, it has offices in New York, Menlo Park, Calif., London, Paris, Hong Kong and Tokyo. Over the past 30 years, KKR has invested in more than 140 transactions with a total value of US$185 billion. About Five Mile Capital Partners: Five Mile Capital Partners - http://www.fivemilecapital.com/-- is an alternative investment management firm established in 2003 with equity capital under management of $800 million. The firm was founded by five professionals, each with over 25 years of experience in all aspects of mortgage, real estate and asset- backed finance. The partners both collectively and individually have built a number of leading financial franchises and participated in creating some of the key innovations in mortgage and real estate capital markets. About Goldman Sachs: Founded in 1869, Goldman Sachs is one of the oldest and largest investment banking firms. Goldman Sachs is also a global leader in private corporate equity and mezzanine investing. Established in 1991, the GS Capital Partners Funds are part of the firm's Principal Investment Area in the Merchant Banking Division. Goldman Sachs' Principal Investment Area has formed 11 investment vehicles aggregating $26 billion of capital to date. With $8.5 billion in committed capital, GS Capital Partners V is the current primary investment vehicle for Goldman Sachs to make privately negotiated equity investments. About GMAC General Motors Acceptance Corporation and its subsidiaries, operating under the umbrella GMAC Financial Services, provide automotive financing, commercial finance, insurance and mortgage products, and real estate services, and have a presence in more than 40 nations. A wholly owned subsidiary of General Motors since 1919, GMAC has extended more than $1.4 trillion in credit to finance more than 162 million vehicles. About General Motors General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Mar. 21, 2006, Moody's Investors Service placed the B2 long-term rating of General Motors Corporation on review for possible downgrade and lowered the company's Speculative Grade Liquidity to SGL-2 from SGL-1. Moody's also changed the review status of General Motors Acceptance Corporation's Ba1 long-term rating to "review for possible downgrade" from "review with direction uncertain" and confirmed GMAC's Not Prime short-term rating. In addition, Moody's changed the review status of ResCap's senior unsecured Baa3 and short-term Prime-3 ratings to "review for possible downgrade" from "review with direction uncertain." These rating actions follow GM's announcement that it will delay filing its annual report on Form 10-K with the SEC due to an accounting issue regarding the classification of cash flows at ResCap, the residential mortgage subsidiary of GMAC. GENESCO INC: Earns $31.2 Million in Fourth Quarter Ended Jan. 28 ---------------------------------------------------------------- Genesco Inc. (NYSE: GCO) reported its financial results for the fourth quarter ended Jan. 28, 2006. The company reported earnings before discontinued operations of $31.2 million for the fourth quarter ended Jan. 28, 2006. Earnings before discontinued operations were $25.4 million, for the fourth quarter ended Jan. 29, 2005. Net sales for the fourth quarter of fiscal 2006 increased 15% to $406 million compared to $353 million for the fourth quarter of fiscal 2005. For the fiscal year ended Jan. 28, 2006, the Company reported earnings before discontinued operations of $62.6 million. Earnings before discontinued operations were $48.5 million in fiscal 2005. Net sales for fiscal 2006 increased 15% to $1.28 billion compared to $1.11 billion for fiscal 2005. "A strong fourth quarter concluded another strong year for Genesco," Genesco Chairman, President and Chief Executive Officer Hal N. Pennington, said. "During the year we successfully executed our strategic plan, enhancing our leadership position in the market by opening 155 net new stores, expanding our mall and non-mall presence, and launching a test of a promising new retail concept." "At the same time, we increased sales by 15%, expanded margins and generated double digit bottom line growth. These results reflect the talent and dedication of the entire Genesco organization." "Net sales at Journeys increased 17.5% to approximately $193 million in the fourth quarter, same store sales rose more than 10% and footwear unit comps increased 12%." "Fashion athletic, fusion, board sport and women's fashion and casual footwear all performed well in the quarter. With more than 700 stores, an unparalleled selection of product, powerful vendor relationships and a world class merchandising team, Journeys remains the destination retailer for teenagers and young adults for footwear and accessories." "Its success in both mall and non-mall locations -- including lifestyle centers, outlets and city streets -- supports its potential for ongoing growth." "An important component of our growth strategy is to leverage our platform and extend our brand strength and expertise across new concepts. In doing so, we see the opportunity to grow with our customer from toddler to teenager to adult." "We have been successful with Journeys Kidz and we are now planning a more aggressive store roll-out for it in fiscal 2007. We have recently opened our first Shi by Journeys store designed to cater to fashionable women in their early 20s to mid 30s, continuing to serve an important Journeys customer as her tastes, needs and lifestyle change. "While it is still very early in the testing process, we are encouraged by the store's initial performance. "Hat World registered another strong quarter, with total sales up 21% to $98 million. Same store sales rose 6%, matching a 6% gain in the same period last year that was driven in part by strong demand for Boston Red Sox products associated with the team's 2005 World Series victory." "The Major League Baseball and NFL categories continued to perform well in the fourth quarter of fiscal 2006. We continue to roll out embroidery machines, which represent an attractive add-on business in the larger stores." "Given its versatility, illustrated by successful operations not only in malls, but also in airports, outlets, street locations, tourist destinations and kiosks, we remain confident about Hat World's significant growth potential." "We plan to open 85 new Lids locations in fiscal 2007 and believe that we can eventually grow this chain to at least 900 stores in North America." "Net sales for the Underground Station Group, which includes Jarman, increased 7% to $54 million and comparable store sales rose 4% in the fourth quarter. Underground Station posted a solid 6% comparable store gain, primarily driven by increased average selling prices." "Throughout the year, the Underground Station team continued to execute its long-term strategic plan, growing the number of Underground Station locations while reducing the Jarman store base in a financially prudent manner." "We ended the year with 180 Underground Station stores, up approximately 9% from the previous year, and 49 Jarman stores, roughly half the number of Jarman stores in operation two years ago. We are pleased with our progress at Underground Station and remain encouraged about its prospects for the future." "Johnston & Murphy continued to deliver improved results during the fourth quarter, with net sales increasing 9% to $49 million and same store sales up 9%." "Johnston & Murphy's performance for both the fourth quarter and the year was driven by meaningful gains in dress casual and casual footwear, coupled with growth in non footwear categories, which now include luggage, belts, socks, outerwear and personal leather goods." "Over the past two years we have worked hard to reposition the Johnston & Murphy brand to broaden its appeal and attract new consumers, while at the same time driving gains in gross margin and profitability. Our results reflect our success so far, and we will continue to focus on improving our operations." "Fourth quarter sales of Licensed Brands were $14 million, essentially flat with a year ago and in line with our projections. Early indications of stronger demand for Dockers Footwear's spring product make us optimistic about the opportunities for improvements in the business in the upcoming year." Genesco also reaffirmed its fiscal 2007 guidance. The Company now expects sales of approximately $1.46 billion for the year and diluted earnings per share to be approximately $2.62. The earnings per share estimate includes expected FAS 123 (R) stock incentive expense and the amortization of recently granted restricted stock totaling approximately $0.17 per share. Last year's EPS reflected expenses of $0.01 per share related to employee restricted stock grants in the third quarter. About Genesco Inc. Headquartered in Nashville, Tennessee, Genesco Inc. -- http://www.genesco.com/-- sells footwear, headwear and accessories in more than 1,750 retail stores in the United States and Canada, principally under the names Journeys, Journeys Kidz, Johnston & Murphy, Underground Station, Hat World, Lids, Hat Zone, Cap Factory, Head Quarters and Cap Connection, and on internet websites http://www.journeys.com/http://www.journeyskidz.com/ http://www.undergroundstation.com/http://www.johnstonmurphy.com/ http://www.lids.com/http://www.hatworld.com/and http://www.lidscyo.com/ The Company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers and Perry Ellis brands. * * * As reported in the Troubled Company Reporter on Mar. 17, 2006, Standard & Poor's Ratings Services revised its outlook on Nashville, Tennessee-based Genesco Inc. to positive from stable. At the same time, the bank loan and recovery ratings on Genesco's senior secured credit facility are raised to 'BB' from 'BB-' and to '1' from '2', reflecting the rating agency's expectation of full recovery in the event of default. All other ratings, including the company's 'BB-' corporate credit rating, are affirmed. GLAZED INVESTMENTS: U.S. Trustee Appoints 3-Member Committee ------------------------------------------------------------ The United States Trustee for Region 11 appointed three creditors to serve on an Official Committee of Unsecured Creditors in Glazed Investments, LLC's chapter 11 case: (a) Ryder Truck Rental, Inc. 55 Shuman Boulevard, Suite 350 Naperville, IL 60565 Attn: Kevin P. Sauntry Fax: (770) 569-6712 (b) BP d/b/a FleetCor Technologies 655 Engineering Drive, Suite 300 Norcross, GA 30092 Attn: Nia Imani Fax: (770) 449-3471 (c) Shaker Recruitment 1100 Lake Street, Suite 300 Oak Park, IL 60303 Attn: Anthony Shaker Fax: (708) 524-0881 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, makes and sells doughnuts. Krispy Kreme owns 97% of the Debtor. The Debtor filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). Daniel A. Zazove, Esq., at Perkins Coie LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $28,599,346 in assets and $32,953,785 in debts. GMACM MORTGAGE: S&P Affirms 28 Certificate Classes' Low-B Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 257 classes of mortgage pass-through certificates from 24 transactions issued by GMACM Mortgage Loan Trust. Approximately $6.04 billion in certificates is affected. The affirmations reflect these: -- Pool performance that has allowed credit enhancement to remain at levels that are sufficient to maintain the current ratings; and -- Excellent collateral pool performance, as demonstrated by cumulative losses of no greater than 51 basis points (series 2003-GH1). As of the February 2006 remittance, severely delinquent loans (90- plus days, foreclosure, and REO) ranged between 0.00% (nine series) and 4.66% (series 2004-GH1). Most of the transactions have not experienced any cumulative losses. Credit support for the transactions is provided by subordination, with the exception of series: * 2001-GH1, * 2003-GH1, * 2003-GH2, and * 2004-GH1. These four series receive credit support in the form of: * subordination, * excess interest, and * overcollateralization. In addition, several senior certificates receive additional credit support from a bond insurance policy provided by Ambac Assurance Corp. or MBIA Insurance Corp. (each have a 'AAA' financial strength rating). The collateral consists primarily of fixed-rate, first lien mortgage loans secured by one- to four-family residential properties. Ratings affirmed: GMACM Mortgage Loan Trust Mortgage pass-thru certs. Series Class Rating ------ ----- ------ 2001-GH1 A-1*, A-2* AAA 2003-AR1 A-2, A-3, A-4, A-5, A-6, X AAA 2003-AR1 M-1 AA 2003-AR1 M-2 A 2003-AR1 M-3 BBB 2003-AR1 B-1 BB 2003-AR1 B-2 B 2003-AR2 A-I-1, A-II-1, A-II-2, A-II-3, A-II-4 AAA 2003-AR2 A-III-1, A-III-2, A-III-3, A-III-4 AAA 2003-AR2 A-III-5, A-IV-1, X-II, X-III AAA 2003-AR2 M-1 AA 2003-AR2 M-2 A 2003-AR2 M-3 BBB 2003-AR2 B-1 BB 2003-AR2 B-2 B 2003-GH1 A-3, A-4, A-5* AAA 2003-GH1 M-1 AA 2003-GH1 M-2 A 2003-GH1 B BBB 2003-GH2 A-2, A-3, A-4 AAA 2003-GH2 M-1 AA 2003-GH2 M-2 A 2003-GH2 B BBB 2003-J1 A-2, A-3, A-4, A-5, A-6, A-8, A-9 AAA 2003-J1 A-10, PO, IO AAA 2003-J2 A-2, A-6, A-7, A-8, A-9, PO, IO AAA 2003-J3 A-1, A-2, PO, IO AAA 2003-J4 1-A-1, 2-A-1, 3-A-1, IO AAA 2003-J4 M-1 AA 2003-J4 M-2 A 2003-J4 M-3 BBB 2003-J4 B-1 BB 2003-J4 B-2 B 2003-J5 A-1, A-2, A-3, IO AAA 2003-J5 M-1 AA 2003-J5 M-2 A 2003-J5 M-3 BBB 2003-J5 B-1 BB 2003-J5 B-2 B 2003-J6 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2003-J6 A-8, A-9, PO, IO AAA 2003-J6 M-1 AA 2003-J6 M-2 A 2003-J6 M-3 BBB 2003-J6 B-1 BB 2003-J6 B-2 B 2003-J7 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2003-J7 A-8, A-9, A-10, PO, IO AAA 2003-J7 M-1 AA 2003-J7 M-2 A 2003-J7 M-3 BBB 2003-J7 B-1 BB 2003-J7 B-2 B 2003-J8 A, PO, IO AAA 2003-J10 A-1, A-2, A-3, PO, IO AAA 2003-J10 M-1 AA 2003-J10 M-2 A 2003-J10 M-3 BBB 2003-J10 B-1 BB 2003-J10 B-2 B 2004-AR1 I-1-A, I-2-A, I-3-A, I-4-A, II-1-A AAA 2004-AR1 II-2-A, II-3-A, II-4-A AAA 2004-AR1 I-M-1, II-M-1 AA 2004-AR1 I-M-2, II-M-2 A 2004-AR1 I-M-3, II-M-3 BBB 2004-AR1 I-B-1, II-B-1 BB 2004-AR1 I-B-2, II-B-2 B 2004-AR2 1-A, 2-A, 3-A, 4-A, 5-A-I, 5-A-II AAA 2004-AR2 M-1 AA 2004-AR2 M-2 A 2004-AR2 M-3 BBB 2004-AR2 B-1 BB 2004-AR2 B-2 B 2004-GH1 A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-GH1 M-1 AA 2004-GH1 M-2 A 2004-GH1 B BBB 2004-J3 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2004-J3 A-8, A-9, A-10, PO, IO AAA 2004-J3 M-1 AA 2004-J3 M-2 A 2004-J3 M-3 BBB 2004-J3 B-1 BB 2004-J3 B-2 B 2004-JR1 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2004-JR1 A-8, A-9, A-10, A-11, A-12, A-13 AAA 2005-AA1 1-A-1, 2-A-1, 2-A-2 AAA 2005-AA1 M-1 AA 2005-AA1 M-2 A 2005-AA1 M-3 BBB 2005-AA1 B-1 BB 2005-AA1 B-2 B 2005-AF1 A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8 AAA 2005-AF1 A-9, A-11, A-12, A-13, PO, IO AAA 2005-AR1 1-A-1, 1-A-2, 1-A-3, 2-A, 3-A AAA 2005-AR1 4-A, 5-A AAA 2005-AR1 M-1 AA 2005-AR1 M-2 A 2005-AR1 M-3 BBB 2005-AR1 B-1 BB 2005-AR1 B-2 B 2005-AR2 1-A, 2-A, 3-A, 4-A AAA 2005-AR2 M-1 AA 2005-AR2 M-2 A 2005-AR2 M-3 BBB 2005-AR2 B-1 BB 2005-AR2 B-2 B 2005-AR3 1-A, 2-A-1, 2-A-2, 3-A-1, 3-A-2, 3-A-3 AAA 2005-AR3 3-A-4, 4-A-1, 4-A-2, 4-A-3, 4-A-5 AAA 2005-AR3 5-A-1, 5-A-2 AAA 2005-AR3 M-1 AA 2005-AR3 M-2 A 2005-AR3 M-3 BBB 2005-AR3 B-1 BB 2005-AR3 B-2 B * denotes bond-insured classes. GOOD SAMARITAN: Moody's Holds B1 Bond Rating & Negative Outlook --------------------------------------------------------------- Moody's Investors Service affirmed the B1 bond rating for the Hospital of the Good Samaritan in Los Angeles, California. The outlook remains negative. The action affects $76 million of Series 1991 bonds. Legal Security: Bonds are secured by a first lien on certain pledged assets, which include the medical center Interest Rate Derivatives: None Strengths: * Adequate cash position, providing a source of liquidity for debt service payments and capital over the medium term * Recent commercial and Medi-Cal rate increases, driving revenue growth and lower operating losses in fiscal year 2005 * High end clinical provider with over 300 open heart surgeries performed in fiscal year 2005, despite declining trends, and Medicare case mix index of 1.73 Challenges: * Higher mix of Medi-Cal patients with revenues derived from Medi-Cal doubling in the last 5 years as the hospital has replaced declining cardiac and other volumes with obstetrics volume, resulting in a higher dependency on the state for adequate funding * Extremely weak cashflow margins at under 2% for multiple years and recent improvement that is not likely to be sustained given expense challenges and potential loss of orthopedic volumes in fiscal year 2006 * A sizable 15% decline in unrestricted cash in the first five months of 2006 in the absence of one-time cash infusions that have sustained cash levels over the last several years * Competitive service area and a unionized workforce * Deferred capital needs, resulting in a very high average age of plant of 24 years Recent Developments/Results: While improved, fiscal year 2005 performance continues a trend of very weak margins and Moody's believes operating performance will be worse in fiscal year 2006. The hospital continues to operate at financial levels that are unsustainable in the long-term and, Moody's believes, will result in accelerated reductions in unrestricted cash in the absence of extraordinary cash infusions. In 2005, Good Samaritan had an $11.6 million operating loss compared with a $22.6 million operating loss in 2004. Operating cashflow in 2005 was a positive $3.7 million, compared with a negative $6.5 million in 2004. The improvement in 2005 was due to higher Medi-Cal rates and supplemental payments from Medicare, both of which relate to the hospital's higher percentage of Medi- Cal patients through the growth of obstetrics. Medi-Cal has doubled as a percent of gross revenue in the last 5 years. While the hospital's ability to obtain these higher rates is good, its dependency on the Medi-Cal program, a historically weak payer whose funding continues to face pressure, is now much greater. The higher Medi-Cal rates may not continue beyond June 2006, although the hospital may be eligible for "replacement" funding through the state's distressed hospital pool. In 2005, the hospital also benefited from higher rates under a new Blue Cross contract. Growth in the obstetrics business primarily drove a 5.6% increase in admissions in 2005, but has replaced profitable cardiac business, which continues to decline rapidly. Open hearts are down 27% in fiscal year 2005 to 301 cases and continues to decline in 2006 due to the departure last year of a major physician group and growth in stents. Furthermore, the hospital is at risk to losing significant orthopedic volumes with the anticipated departure of a major orthopedist over the next several months; the actual impact will depend on the hospital's ability to recruit replacements to at least partially replace lost volume. The hospital is budgeting an operating loss in fiscal year 2006 that is comparable to the loss in 2005, but Moody's believes this budget will be difficult to achieve and performance is likely to be worse in 2006. On the revenue side, the budget does not include the loss of orthopedic volumes and assumes Medi-Cal rates overall will remain stable. On the expense side, the budget assumes minimal increases in bad debt and supplies expense and a reduction in agency usage, assumptions that may be aggressive given the hospital's experience in the past and through the interim period. Through the five-month year-to-date period, Good Samaritan reported an operating loss of $6.1 million compared to prior year's $9.8 million. Unrestricted cash was maintained in fiscal year 2005 because of the release of $8 million in workers compensation reserves no longer needed because of the hospital's claims experience. Without these one-time funds, cash would have declined by about $8 million as expected last year. Absolute cash has been maintained the last several years from one-time cash infusions including $12 million in unrestricted gifts in 2003 and 2004 in addition to the workers compensation reserves in 2005. Unrestricted cash as of fiscal yearend 2005 (August 31) was $61 million. Unrestricted cash as of Jan. 31, 2006, was down about $10 million and Moody's expects by yearend cash may decline further. Capital spending is budgeted at $10 million for fiscal year 2006. Despite the improvement in 2005, as Moody's discussed in prior reports Moody's believes the organization has fundamental cultural and operating issues that suggest operations will continue to be very weak. The absence of more significant initiatives to ensure the hospital's long-term viability suggest a culture that may be resistant to major changes and has been overly reliant on its cash position to support operations and fund operating losses. Outlook: The negative outlook reflects our belief that the hospital is not taking adequate measures to improve operations and cashflow, which will result in further declines in cash and greater risk of payment default over the medium-term. Moody's believes more significant initiatives need to be pursued to ensure long-term viability and Moody's do not foresee meaningful improvement until the board resolves to make major changes. What could change the rating up: Multiple years of substantially improved operating performance, combined with maintenance of cash without reliance on one-time infusions What could change the rating down: Further decline in unrestricted cash, continued operating losses Key Indicators Assumptions & Adjustments: -- Based on financial statements for The Hospital of the Good Samaritan -- First number reflects audit year ended Aug. 31, 2004 -- Second number reflects audit year ended Aug. 31, 2005 -- Investment returns smoothed at 6% unless otherwise noted -- Non-recurring adjustments include elimination of: (1) $2.2 million and $3.0 million in third-party settlements in fiscal years 2004 and 2005, respectively; and (2) $6 million contribution in 2004. * Inpatient admissions: 16,373; 17,284 * Total operating revenues: $209.0 million; $232.9 million * Moody's-adjusted net revenue available for debt service: ($0.8) million; $11.0 million * Total debt outstanding: $75.7 million; $75.7 million * Maximum annual debt service (MADS): $7.4 million; $7.4 million * MADS coverage based on reported investment income: 0 times; 1.6 times * Moody's-adjusted MADS coverage: (0.1) times; 1.5 times * Debt-to-cash flow: (12.0) times; 13.8 times * Days cash on hand: 98 days; 94 days * Cash-to-debt: 79%; 80% * Operating margin: (10.8)%; (5.0)% * Operating cash flow margin: (3.1)%; 1.6% GRUMMAN OLSON: Court Extends Time to Object to Proofs of Claim -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended, until June 1, 2006, the deadline within which the Official Committee of Unsecured Creditors appointed in Grumman Olson Industries, Inc.'s chapter 11 case, can object to proofs of claim filed against the Debtor's estate. On Oct. 19, 2004, the Court confirmed the first amended joint liquidating plan proposed by the Debtor and the Committee. The plan took effect on Nov. 10, 2005. The Committee, with the assistance of Paul Gunther, the Debtor's president and sole director, has worked diligently to reconcile claims filed against the company. This reconciliation is necessary before a final distribution can be made to creditors and the Debtor's case can be closed. Grumman Olson Industries, Inc., which derived its operating revenues primarily from the sale of truck bodies, filed for chapter 11 protection on December 9, 2002 (Bankr. S.D.N.Y. Case No. 02-16131). Sanford Philip Rosen, Esq., at Sanford P. Rosen & Associates, P.C., and James M. Matthews, Esq., at Carl A. Greci, Esq., represent the Debtor in its restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed $30,022,000 in total assets and $38,920,000 in total debts. GRUPO GIGANTE: S&P Puts BB Rating on $250 Million Notes Due 2016 ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Grupo Gigante S.A. de C.V. At the same time, Standard & Poor's assigned its 'BB' rating to Gigante's $250 million notes due 2016. The outlook is stable. Proceeds of the proposed bond will be used to refinance the MXN$2.7 billion outstanding bank credit facility with Banco Inbursa S.A. due 2015. "The ratings reflect Gigante's relatively high debt leverage, its fair financial profile, the risks imposed by the increased competition in most business formats in which Gigante participates, and the correlation with economic cycles," said Standard & Poor's credit analyst Raul Marquez. "Balancing this position are the steps taken by the company to improve operating efficiencies and margins and its position as one of the top players in the highly competitive Mexican supermarket industry." Founded in 1962, Gigante is one of the most recognized supermarket names in Mexico. Over the years, Gigante has expanded beyond Mexico City, buying supermarket chains in large cities such as Monterrey and Guadalajara, while establishing a widespread national coverage with stores in more than 85 cities, across all of the Mexican states. With an estimated 10% market share, Gigante owns Mexico's fourth-largest chain of supermarkets in terms of revenues with a diversity of formats designed to be attractive to all socioeconomic groups. It has the second-largest number of supermarket outlets in Mexico, as well as smaller retailing operations in the U.S., through Gigante USA, and Central America, through its joint venture with Office Depot. The stable outlook reflects Standard & Poor's expectation that Gigante will be able to maintain its business position while the company's operating improvements continue providing adequate debt coverage and debt remains at current levels. The rating is currently constrained by the challenges the company will face during 2006 as it continues with its recent pricing strategy and the implementation of new operational and technological efficiencies, as well as the effects of the intense competition from the diverse sector players. Hence, a positive rating action is not foreseen in the medium term. A further deterioration of the company's financial profile could pressure the ratings downward. HAYES LEMMERZ: Poor Performance Cues S&P to Put B+ Rating on Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Hayes Lemmerz International Inc. on CreditWatch with negative implications because of the poor near-term earnings and cash-flow prospects for the wheel manufacturer amid challenging conditions in the automotive industry. Northville, Michigan-based Hayes has total debt of about $850 million, and it has underfunded employee benefit obligations of $400 million. Hayes has reported weak results during the past year. For the first nine months of its fiscal 2005 ended Jan. 31, 2006, the company reported: * adjusted EBITDA of $164 million; * a 17% decline from the prior year's level; and * cash flow generation was negative. Adjusted EBITDA excludes: * asset impairments, * discontinued operations, and * other special charges. "Industry conditions for automotive suppliers have been tough because of higher raw material costs, customer market-share shifts, product mix changes, and pricing pressure," said Standard & Poor's credit analyst Martin King. "In addition, liquidity has become more constrained for auto suppliers as credit ratings have declined, reducing borrowing availability under asset-based credit facilities and causing some vendors to tighten credit terms." Hayes is expected to continue to experience earnings pressures during 2006 as its two largest customers: * Ford Motor Co., and * General Motors Corp., continue to suffer from market share declines and operating challenges. These two companies together account for more than 30% of Hayes' sales. Soft demand for light-truck products, which account for a disproportionate share of Hayes' revenues, could also hurt earnings. There are also ongoing challenges, such as tough global competition. The business is furthermore highly capital intensive, and auto demand is cyclical. The company has only partially been able to compensate for these disadvantages with its good geographic diversity: About 50% of its revenue and more than half of its EBITDA come from outside North America. Hayes' balance sheet is highly leveraged, with total debt to EBITDA of about 4.8x. Furthermore, its cash-flow protection is thin, as EBITDA (minus capital expenditures) to interest expense is about 1.1x. Adjusted for the company's underfunded benefit obligations, debt to EBITDA is about 6x. Although Hayes should benefit from restructuring actions and new business additions in the next few years, industry pressures will likely make earnings growth and debt reduction difficult. Standard & Poor's had expected adjusted debt to EBITDA to average about 4x. Standard & Poor's will review Hayes' business prospects to determine when the company would likely improve its operating performance. The ratings could be lowered if it appears credit protection measures will remain weak for a prolonged period. INAMED CORP: Closes Merger Deal with Allergan Inc. -------------------------------------------------- Allergan, Inc. (NYSE:AGN) completed its acquisition of Inamed Corporation (NASDAQ:IMDC). The acquisition of Inamed expands Allergan's global position as a premier specialty pharmaceutical and medical device company in high-growth markets and creates a world-leading medical aesthetics franchise, providing a broad, complementary portfolio of pharmaceutical and medical device products and offerings to physicians and patients. As previously reported at the expiration of the exchange offer for all outstanding Inamed shares on March 17, 2006, more than 90% of the outstanding Inamed shares had been tendered and were accepted for exchange. The acquisition was completed on March 23, 2006, through a short-form merger of a subsidiary of Allergan with and into Inamed. "This is an exciting day for Allergan as we establish another leadership position in one of the world's fastest growing markets," David E.I. Pyott, Allergan's Chairman of the Board and Chief Executive Officer, said. "The acquisition will help us better serve the needs of our customers and address the growing demand among the `baby boomer' generation for safe and effective products that enhance one's well being and appearance." "The integration of Inamed's and Allergan's products, the pipelines, and, most importantly, the people will prove to be a very powerful and productive asset for our stockholders for many years to come," added Nicholas Teti, Inamed's former Chairman of the Board, President and Chief Executive Officer. "My Inamed colleagues are proud to be a part of this exciting strategic enterprise." Final Results of Exchange Offer Allergan also confirmed the final results of its exchange offer for all outstanding shares of Inamed common stock. In the exchange offer, Allergan's wholly owned subsidiary offered to exchange for each outstanding share of Inamed common stock, either $84 in cash or 0.8498 of a share of Allergan common stock, at the election of the holder, subject to proration, so that 45% of the aggregate Inamed shares tendered will be exchanged for cash and 55% of the aggregate Inamed shares tendered will be exchanged for shares of Allergan common stock. A total of 34,647,820 shares, representing approximately 93.86%, of Inamed's outstanding common stock, were validly tendered and acquired pursuant to the exchange offer, including all Inamed shares delivered after the expiration of the offer to satisfy guaranteed deliveries. Of the aggregate Inamed shares validly tendered, approximately 0.18% were tendered subject to cash elections and approximately 99.82% were tendered subject to Allergan common stock elections, and therefore the stock exchange offer consideration is oversubscribed. As a result, stock exchange offer elections will be prorated so that Inamed stockholders will receive Allergan common stock for approximately 55.10% of the aggregate Inamed shares tendered subject to valid stock elections, with cash paid in respect of fractional shares of Allergan common stock, and the remaining shares tendered pursuant to valid stock elections will be exchanged for cash at the $84 per Inamed share exchange offer price. On a per Inamed share basis, this proration ratio will result in each Inamed share tendered pursuant to a valid stock election being exchanged for approximately 0.46825 of a share of Allergan common stock and approximately $37.71 in cash. Anticipated Effects of the Acquisition The acquisition is expected to be neutral to Allergan's adjusted Earnings per Share in 2006 and accretive to adjusted EPS in 2007 and beyond. 100-Day Integration Plan Allergan is immediately commencing a 100-Day Integration Plan to facilitate as seamless a transition as possible in combining the two companies, and to maintain continued excellence in customer and patient service. Within this time frame, Allergan plans to complete the majority of the organizational restructuring for the combined company. Allergan has retained the services of Boston Consulting Group to assist in the integration process. About Allergan, Inc. Headquartered in Irvine, California, Allergan, Inc. -- http://www.allergan.com/-- is a technology-driven, global specialty pharmaceutical and medical device company that develops and commercializes innovative products for the ophthalmology, neurosciences, medical dermatology, medical aesthetics and other specialty markets. Allergan is dedicated to delivering value to its customers, satisfying unmet medical needs, and improving people's lives. About Inamed Corp. Headquartered in Santa Barbara, California, Inamed Corp. -- http://www.inamed.com/-- provides innovative solutions for the breast aesthetics market for more than 25 years through our McGhan Medical and McGhan International subsidiaries. In addition, the Company has provided the same level of high quality products and services for the facial aesthetics market since 1999 through our acquisition of Collagen Aesthetics, and through our partnerships with Biomatrix and Genzyme Biosurgery. The Company believes that it has breakthrough technology solutions for obesity intervention through our BioEnterics subsidiary, which the Company formed in 1991. * * * As reported in the Troubled Company Reporter on Nov. 17, 2005, Standard & Poor's Ratings Services placed its ratings for Inamed Corp., including 'BB' corporate credit rating, on CreditWatch with positive implications after specialty pharmaceutical company Allergan Inc.'s announcement that it was planning to acquire Inamed for roughly $3.1 billion. INT'L GALLERIES: Committee Hires Winstead Sechrest as Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas gave the Official Committee of Unsecured Creditors of International Galleries Inc., permission to employ David W. Elmquist, Esq., and Winstead Sechrest & Minick P.C., as its counsel. Winstead Sechrest will: a) advise the Committee with respect to the Committee's powers and its duties and responsibilities to creditors; b) advise the Committee concerning the proposed sale of the Debtor's business or its assets; c) consult with legal counsel and other representatives of the Debtor concerning the chapter 11 case and the administration of the Debtor's estate; d) interact with and assist other professional that the Committee may employ; e) prepare for and attend the first meeting of creditors; f) review the Debtor's loan documents and advise the Committee regarding the validity and enforceability of liens asserted against property of the Debtor; g) advise the Committee concerning the actions that it might take to collect and to recover property for the benefit of the Debtor's creditors; h) prepare and present on behalf of the Committee all necessary and appropriate applications, motions, pleadings, court orders, notices, and other documents, and review all financial and other reports to be filed in this case; i) advise the Committee concerning, and prepare responses to, applications, motions, pleadings, notices and other papers that may be filed and served in this case; j) appear on behalf of the Committee at all hearings in this case; k) advise the Committee in connection with any suggested or proposed plan(s) of reorganization; l) advise the Committee in connection with the formulation, negotiation and promulgation of alternative plans of reorganization if necessary or appropriate; and m) perform all other legal services for and on behalf of the Committee that may be necessary or appropriate. Mr. Elmquist disclosed the Firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- David W. Elmquist Shareholder $450 Jeff Carruth Associate $315 Linda Kaye Paquette Paralegal $150 Mr. Elmquist assures the Court that Winstead Sechrest does not hold or represent any interest adverse to the Committee or the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Addison, Texas, International Galleries Inc. -- http://www.igi-art.com/-- sponsors artists and sells their artwork through referrals. The company filed for chapter 11 protection on Jan. 31, 2006 (Bankr. N.D. Tex. Case No. 06-30306). Omar J. Alaniz, Esq., at Neligan Tarpley Andrews & Foley LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets less than $50,000 and debts between $10 million to $50 million. JAKE'S GRANITE: Arizona Court Confirms Plan of Reorganization ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona confirmed Jake's Granite Supplies, L.L.C.'s Plan of Reorganization on March 1, 2006. Daniel E. Garrison, Esq., at Gallagher & Kennedy, P.A., in Phoenix, Arizona, tells the Court that the Debtor has sufficient cash from the sale of substantially all of its assets to Cemex Building Materials, L.P., to fully pay all allowed claims. Mr. Garrison said there's approximately $4,645,000 remaining in the estate -- net of all remaining cure payments, all claims of unsecured creditors, and anticipated administrative costs -- plus the $500,000 Cemex holdback. Holders of claims entitled to priority pursuant to Section 507(a)(3), (4), (5) or (6) of the Bankruptcy Code will be paid in cash on the effective date. If the Debtor elects to pay those claims over time, the Debtor will pay interest at 7% annually. Holders of secured claims will either be paid in cash or will receive the collateral securing their claims. In the event a secured creditor's collateral is insufficient to fully satisfy a claim, the deficiency will be treated as an unsecured claim. Holders of unsecured claims will be paid in cash on the effective date. If those claims are paid over time, they will accrue interest at 7% annually. Holders of equity interests will retain their stake in the Company. A full-text copy of the Plan of Reorganization is available for free at: http://www.ResearchArchives.com/bin/download?id=060222022212 Headquartered in Chandler Heights, Arizona, Jake's Granite Supplies, L.L.C., owns and operates a sand and gravel mining operation in Buckeye, Arizona. The Company filed for chapter 11 protection on June 13, 2005 (Bankr. D. Ariz. Case No. 05-10601). Joseph E. Cotterman, Esq., Gallagher & Kennedy, P.A., represent the Debtor in their restructuring efforts. Brian N. Spector, Esq., at Jennings Strouss & Salmon, PLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets of $16,473,500 and debts of $6,141,198. JEROME DUNCAN: U.S. Trustee Wants Case Converted to Chapter 7 ------------------------------------------------------------- Saul Eisen, Esq., the U.S. Trustee for Region 9, asks the U.S. Bankruptcy Court for the Eastern District of Michigan, to convert Jerome Duncan, Inc.'s chapter 11 case to a chapter 7 liquidation. Mr. Eisen tells the Court that the remaining unencumbered estate assets consist of: * the Debtor's interest in certain foreign car dealerships, * various potential chapter 5 causes of action, and * potential causes of action against affiliated entities and corporate insiders. The Court approved the sale of substantially all of the Debtor's assets to Suburban Ford of Sterling Heights L.L.C. for $14.8 million, free and clear of all liens, claims and encumbrances. Details about that transaction appeared in the Troubled Company Reporter on Feb. 2, 2006. Mr. Eisen says that since the Debtor's primary assets have been sold, James H. Harris, at O'Keefe and Associates, the Debtor's chief restructuring officer, may choose to resign or, at the Court's behest, be discharged of his responsibilities. Either way, Mr. Eisen contends, the chapter 11 case is now at a point where the Debtor's principals and management may resume making decisions as to the disposition of the remaining assets and be responsible once again for compliance with the duties of a debtor in possession. Mr. Eisen says the Debtor is faced with the untenable task of decided whether causes of action should be brought against its principals, insiders and affiliated entities. Mr. Eisen says that there are also potential causes of action against Ford Motor Credit Company whose debt is guaranteed by some of these individuals. Mr. Eisen believes, however, that it would not be appropriate for the Debtor's principals to take those actions since it exemplifies "conflict of interest." Mr. Eisen says there is no practical reason for the case to remain under chapter 11 since the Debtor's operation will come to an end shortly. Mr. Eisen concludes that converting the case to a chapter 7 liquidation and have an independent trustee investigate the potential claims and causes of action will be more beneficial and efficient. The Court will convene a hearing on Mar. 28, 2006, to consider the U.S. Trustee's request. Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc., was the largest dealer of automobiles manufactured by Ford Motor Company in the state of Michigan. The Debtor employed over 200 individuals in its operations and generated between $300 and $500 million in annual sales. The company filed for chapter 11 protection on June 17, 2005 (Bankr. E.D. Mich. Case No. 05-59728). Arnold S. Schafer, Esq., at Schafer and Weiner, PLLC, represents the Debtor in its restructuring efforts. Judith Greenstone Miller, Esq., at Jaffe, Raitt, Heuer & Weiss, PC, represents the Official Committee of Unsecured Creditors. JOHNSONDIVERSEY HOLDINGS: S&P Puts Low-B Ratings on Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on JohnsonDiversey Holdings Inc. and its subsidiary JohnsonDiversey Inc. on CreditWatch with negative implications. This includes: * the 'B+' corporate credit and senior secured ratings; and * the 'B-' senior unsecured ratings. At Dec. 30, 2005, total consolidated debt, including off-balance- sheet accounts receivable and lease financing, and unfunded postretirement obligations on a tax-effected basis, was about $2.3 billion. "The CreditWatch listing follows the company's report of weak fourth-quarter results and indicates the potential for a modest downgrade," said Standard & Poor's credit analyst Cynthia Werneth. Any earnings shortfall compared with expectations is especially important in view of the company's high debt leverage and the fact that it has recently embarked on a major restructuring program. This program, expected to take two to three years to complete, will involve: * the closure of a significant number of manufacturing and other facilities; * major workforce reductions; and * the potential divestiture of or exit from certain non-core or underperforming businesses. The company is considering for divestiture businesses accounting for about $500 million or 15% of 2005 net sales. Management expects pretax restructuring and other non-recurring cash costs to be sizable, between $345 million and $370 million, with total annual savings of approximately $150 million to $175 million targeted by the end of 2008. Even before the recent earnings report, the financial profile was expected to be weak during the next two years while cash is expended and earnings potentially decline meaningfully because of divestitures before benefits are fully realized. The CreditWatch will be resolved once Standard & Poor's has reviewed 2005 results and re-examined expectations for 2006 and beyond. JohnsonDiversey is a leading global manufacturer and marketer of cleaning and hygiene products and related services for the institutional and industrial cleaning market. The company is the second-largest player in a still-fragmented, approximately $18 billion market. JOHN LINEK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: John Linek, Inc. 1900 North Austin Chicago, Illinois 60639 Bankruptcy Case No.: 06-03021 Chapter 11 Petition Date: March 23, 2006 Court: Northern District of Illinois (Chicago) Judge: John H. Squires Debtor's Counsel: Joseph A. Baldi, Esq. Joseph Baldi & Associates, P.C. 19 South Lasalle Street, Suite 1500 Chicago, Illinois 60603 Tel: (312) 726-8150 Fax: (312) 332-4629 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ H&H Machinery Movers Shipper Claim for $241,000 Ellison, Nelsen Zehe & Antas Damages 100 West Monroe Street Chicago, IL 60603 Salem Logistics, Inc. Shipper Claim for $86,778 301 North Main Street Damages Suite 2600 Winston Salem, NC 27101 CH Robinson Worldwide Shipper Claim for $47,614 P.O. Box 3470 Damages Chicago, IL 60654 Triple Ell Transportation $47,613 NYK Logistics Shipper Claims $28,252 RCT Transportation Services Damage Claim $20,757 Harris Bank Line of Credit $19,889 Panama Banana Shipper Claims $5,975 Pacific Creditors Association Shipper Claims $4,916 Landstar Ranger $590 B&G Truck Repair & Trailer Truck Repair Unknown California Highway Patrol Damage Claim Unknown Citicapital Commercial Corp. Equipment Unknown Department of Internal Revenue Truck Fees Claim Unknown Dwayne Woodley Independent Unknown Contractor Edward Antos Independent Unknown Contractor Financial Federal Credit, Inc. Debt Guaranty Unknown General Electric Capital Corp. Equipment Unknown H&J Enterprises Shipper Claim Unknown Jan Baclawski Independent Unknown Contractor KANSAS CITY SOUTHERN: S&P Puts B- Preferred Stock Rating on Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' ratings on Kansas City Southern's preferred stock on CreditWatch with negative implications. The corporate credit rating is 'BB-' with a stable outlook. Kansas City Southern announced that it failed to meet a bond indenture covenant threshold and is therefore restricted from paying cash dividends on its preferred stock. The covenant issue was primarily due to a non-cash charge of $37.8 million incurred in the third quarter of 2005 to recognize additional costs related to occupational and personal injury claims. The company has called for a shareholder meeting to vote on a proposed amendment to terms of its 4.25% redeemable cumulative convertible preferred stock, series C, to allow for the payment of dividends in stock (the current terms allow only for payment of dividends in cash). While the company is allowed to pay stock dividends on its 5.125% cumulative convertible perpetual preferred stock, series D, it cannot do so unless it can also pay dividends on the series C preferred stock. If shareholder approval is granted, and Kansas City Southern preferred shareholders receive stock dividends of equal value to what the cash dividend payments would have been, ratings are likely to be affirmed and removed from CreditWatch. "Failure to achieve shareholder approval for the change in terms would likely result in a lowering of the rating to 'C' until the next dividend payment due date [mid-May] and then 'D' once the dividend payments are missed." Said Standard & Poor's credit analyst Lisa Jenkins. Ratings on Kansas City Southern reflect its leveraged capital structure and challenges associated with the integration of its recently acquired Mexican subsidiary TFM S.A. de C.V. (recently renamed Kansas City Southern de Mexico S.A. de C.V. -- KCSM), offset to some extent by the favorable characteristics of the U.S. freight railroad industry and the company's strategically located rail network. Ratings incorporate an expectation that credit protection measures will improve at Kansas City Southern over the next two years as a result of benefits from the integration of KCSM and from continuing healthy market fundamentals. Kansas City Southern recently delayed the filing of its 2005 10-K. The company's debt to capital (adjusted for operating leases) is currently estimated to be in the mid-50% area. Adjusted funds from operations to debt (including only a partial year of the consolidation of KCSM) is estimated to be below 10%. KING PHARMA: $400 Mil. Note Offering Cues Moody's to Hold Ratings ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of King Pharmaceuticals, Inc., including the Ba3 Corporate Family Rating, Ba2 senior secured revolver due 2007, and Ba3 senior unsecured guaranteed convertible debentures due 2021. Following the rating action, the rating outlook remains negative. The rating action follows the company's announcement that it has commenced a private offering for $400 million of convertible notes due 2026. Moody's has not assigned a rating to these notes. The affirmation of King's Ba3 Corporate Family Rating reflects several key factors outlined in Moody's Global Pharmaceutical Rating Methodology. King reported $525 million of cash and short term investments as of Dec. 31, 2005, and reported 2005 cash flow from operations of $520 million. King's cash coverage of debt and CFO/Debt both map to the "Aaa" category. However, product concentration risk is relatively high, and King faces high exposure to patent expirations and patent challenges. Moody's acknowledges several developments that positively affect King's credit profile, including: (1) good cash flow from operations and free cash flow in 2005; (2) resolution as of December 31, 2005 of Section 404B material weaknesses in internal financial controls present as of Dec. 31, 2004; (3) the settlement agreement reached in October 2005 to resolve various outstanding governmental investigations including the Department of Justice; and (4) the recently proposed settlement of Altace patent litigation with Cobalt Pharmaceuticals, Inc. In addition, Moody's believes that the issuance of new convertible debentures helps mitigate the refinancing risk associated with the Nov. 15, 2006 put date of King's existing $345 million convertible notes. Despite the positive developments, the rating outlook remains negative, primarily because of Moody's concerns about: (1) the long term sustainability of King's cash flow; and (2) the uncertain success of King's long term growth strategy. To offset the potentially significant loss of revenues that could occur over the next several years, Moody's believes that King will most likely conduct business development activity to seek long term growth. However, the valuations for acquisitions and in- licensing deals in the pharmaceutical sector have been relatively high recently. In addition, consolidation within the specialty pharmaceutical market is accelerating, and Moody's believes that King's role in this activity remains unclear. The ratings could be downgraded if any of King's major products, such as Altace or Skelaxin, face rapid erosion because of generic competition, or if King makes large cash-financed acquisitions. To evaluate these scenarios, Moody's would consider the key factors in our rating methodology, which include a combination of credit ratios as well as ratios to assess operating risk. Although upward pressure appears limited over the short term, King's ratings over the long term will depend on its ability to prepare for the eventual loss of Altace revenue by developing or acquiring pharmaceutical products to fill out its product portfolio. To consider a ratings upgrade, Moody's would expect reduced product concentration, greater cash flow sustainability, and clear financial targets. Ratings affirmed: * Ba3 Corporate Family Rating * Ba2 senior secured revolving credit facility of $400 million due 2007 * Ba3 senior unsecured guaranteed convertible debentures of $345 million due 2021 King Pharmaceuticals, Inc., headquartered in Bristol, Tennessee, manufactures, markets, and sells primarily acquired branded prescription pharmaceutical products. The company reported revenues of approximately $1.8 billion in 2005. KNOLL INC: Dec. 31 Balance Sheet Shows $37.7 Mil. Positive Equity ----------------------------------------------------------------- Knoll Inc. delivered its financial results for the year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 16, 2006. Knoll reported $35,909,000 of net income on $807,960,000 of sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $582,546,000 in total assets, $544,830,000 in total liabilities, and $37,716,000 in positive stockholders' equity. Full-text copies of Knoll Inc.'s financial statements for the year ended Dec. 31, 2005, are available for free at http://ResearchArchives.com/t/s?6da Headquartered in East Greenville, Pennsylvania, Knoll Inc., designs and manufactures branded office furniture products and textiles, serves clients worldwide. At Dec. 31, 2005, the company's balance sheet showed $37,716,000 in positive stockholders' equity compared to a $21,345,000 stockholders' equity deficit at Dec. 31, 2004. * * * As reported in the Troubled Company Reporter on Sept. 12, 2005, Standard & Poor's Ratings Services assigned its 'BB-' rating and its '3' recovery rating to Knoll Inc.'s proposed $450 million senior secured credit facilities, indicating that lenders can expect meaningful recovery of principal in the event of payment default. These ratings are based on preliminary offering statements and are subject to review upon final documentation. In addition, Moody's Investors Service assigned a Ba3 rating to the Company's $450 million senior secured credit facility, which is comprised of a revolver and a term loan. At the same time, Moody's affirmed Knoll's corporate family rating at Ba3. Moody's said the ratings outlook is stable. Moody's said it would withdraw its ratings on Knoll's $425 million senior secured term loan and $75 million revolver upon the closing of the new secured credit facility. LB-UBS TRUST: Moody's Holds Junked $3 Mil. Class S Cert. Rating --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of 12 classes and affirmed the ratings of nine classes of LB-UBS Commercial Mortgage Trust 2002-C1, Commercial Mortgage Pass-Through Certificates, Series 2002- C1: * Class A-1, $18,308,187, Fixed, affirmed at Aaa * Class A-2, $176,000,000, Fixed, affirmed at Aaa * Class A-3, $242,000,000, Fixed, affirmed at Aaa * Class A-4, $457,847,000, Fixed, affirmed at Aaa * Class X-CL, Notional, affirmed at Aaa * Class X-CP, Notional, affirmed at Aaa * Class B, $48,162,000, Fixed, upgraded to Aaa from Aa2 * Class C, $18,643,000, Fixed, upgraded to Aaa from Aa3 * Class D, $10,875,000, Fixed, upgraded to Aaa from A1 * Class E, $18,643,000, Fixed, upgraded to Aaa from A2 * Class F, $24,857,000, Fixed, upgraded to Aa1 from A3 * Class G, $20,197,000, Fixed, upgraded to Aa3 from Baa1 * Class H, $18,643,000, Fixed, upgraded to A3 from Baa2 * Class J, $17,089,000, Fixed, upgraded to Baa1 from Baa3 * Class K, $12,429,000, Fixed, upgraded to Baa3 from Ba1 * Class L, $13,982,000, Fixed, upgraded to Ba1 from Ba2 * Class M, $6,214,000, Fixed, upgraded to Ba2 from Ba3 * Class N, $6,215,000, Fixed, upgraded to Ba3 from B1 * Class P, $6,214,000, Fixed, affirmed at B2 * Class Q, $4,661,000, Fixed, affirmed at B3 * Class S, $3,107,000, Fixed, affirmed at Caa2 As of the March 17, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 8.2% to $1.1 billion from $1.2 billion at securitization. The Certificates are collateralized by 140 loans, ranging in size from less than 1.0% to 13.7% of the pool, with the top ten loans representing 40.3% of the pool. The pool includes four shadow rated investment grade loans, which comprise 28.2% of the pool. Twenty loans, representing 22.9% of the pool, have defeased and are collateralized by U.S. Government securities. The defeased loans include three of the top 10 loans in the pool -- Tanamera Apartments, 260 11th Avenue and 235 Second Avenue. Four loans have been liquidated from the pool resulting in an aggregate realized loss of approximately $352,000. Two loans, representing 1.0% of the pool, are in special servicing. Moody's has estimated aggregate losses of $2.0 million for the specially serviced loans. Thirty-three loans, representing 21.8% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 operating results for 99.6% of the performing loans, excluding the defeased loans, and partial year 2005 operating results for 96.4% of the pool. Moody's weighted average loan to value ratio for the conduit component is 86.1%, compared to 89.2% at securitization. Moody's upgrade is due to a large percentage of defeased loans, improved overall pool performance and increased credit support. The largest shadow rated loan is the Fashion Valley Mall Loan, which represents the senior portion of a $190.7 million mortgage loan. The loan is secured by a 1.7 million square foot super- regional mall located in San Diego, California. The mall is a dominant mall in its market. It is anchored by Neiman Marcus, Nordstrom, Saks, Macy's, Robinsons-May and J.C. Penney. Mall shop occupancy was 97.4% as of December 2005, essentially the same as at securitization. Comparable mall shop tenant sales were $771 per square foot in calendar year 2005, compared to $560 per square foot at securitization. The loan sponsors are Simon Property Group and Prime Property Fund. Moody's current shadow rating is Aaa, compared to Aa2 at securitization. The second largest shadow rated loan is the 400 Atlantic Street Loan, which represents the senior portion of a $112.0 million mortgage loan. The loan is secured by a 500,000 square foot Class A office building located in Stamford, Connecticut. The property is 91.6% leased, compared to 100.0% at securitization. The largest tenant is American Express which occupies only a portion of its space and has subleased the majority of the unoccupied space to UBS at a significantly reduced rate. American Express has a lease termination option in September 2008 with the payment of an $8.5 million termination fee. International Paper Company is the second largest tenant and has indicated that it will be vacating the building during the 3rd Quarter of 2006. The Stamford Class A office market vacancy is currently in excess of 17.0%. Moody's current shadow rating is A3, compared to A2 at securitization. The third shadow rated loan is the U-Haul Portfolio Loan, which consists of four cross collateralized loans secured by 37 self storage facilities located in 20 states. The portfolio includes 16,500 units. Performance has been stable since securitization. Moody's current shadow rating is Baa1, the same as at securitization. The fourth shadow rated loan is the Westfield Portfolio Loan, which represents the subordinate portion of a $122.7 million mortgage loan. The loan is secured by two shopping centers located in California. Downtown Plaza is a 1.2 million square foot mixed use project located in downtown Sacramento. The center consists of 900,000 of retail space and three office buildings totaling 283,000 square feet. Occupancy has declined to 87.9% from 97.5% at securitization. Eastland Center is an 870,000 square foot retail center located in West Covina. The property is 99.2% occupied, essentially the same as at securitization. The financial performance of the portfolio has declined since securitization due to increased vacancy at Downtown Plaza. Moody's current shadow rating is Baa3, compared to Baa2 at securitization. The top three conduit exposures represent 7.7% of the pool. The largest conduit exposure is the First Bank and Trust Center Loan, which is secured by 455,000 square foot Class A office building located in Metairie, Louisiana. The property suffered wind and water damage from Hurricane Katrina, but most of the damage has been repaired. The property is 94.0% occupied, essentially the same as at securitization. Performance has declined since securitization due to property damage caused by Hurricane Katrina. Moody's LTV is 87.1%, compared to 77.2% at securitization. The second largest conduit exposure is the Adler Industrial Portfolio, which consists of nine cross collateralized loans secured by 16 industrial/flex properties located in four cities in Florida. The portfolio totals 759,000 square feet and is 92.2% occupied, essentially the same as at securitization. Moody's LTV is 87.4%, compared to 92.8% at securitization. The third largest conduit exposure is the Metro Park North Loan, which is secured by an 189,000 square office building located in Rockville, Maryland. The property is 100.0% leased, the same as at securitization. Moody's LTV is 85.8%, compared to 96.8% at securitization. The pool's collateral is a mix of retail, U.S. Government securities, office, multifamily and industrial and self storage. The collateral properties are located in 33 states and Washington, D.C. The highest state concentrations are California, Texas, Connecticut, Florida, and Louisiana. All of the loans are fixed rate. LIBERTY GLOBAL: Selling French Cable Unit for EUR1.25 Billion ------------------------------------------------------------- Liberty Global, Inc., entered into a non-binding letter of intent with Altice and Cinven for the sale of 100% of its French cable business, UPC France SA through its subsidiary UPC Broadband France SAS. Liberty Global will sell UPC France for approximately EUR1.25 billion in cash, assuming zero net debt at closing. No other purchase price adjustments are envisioned. The sale price represents a multiple of approximately 11.4 times UPC France's 2005 operating cash flow, as customarily defined by Liberty Global, except that corporate overhead allocations have been excluded. Among other things, the transaction is subject to negotiation of definitive documents, completion of due diligence and financing, all of which are expected to be completed in Q2 2006. Following signing of the definitive documents, closing will be subject to the receipt of necessary regulatory approvals. Mike Fries, President and Chief Executive Officer of Liberty Global said: "With this transaction, we are realizing an excellent return on our investment in France over the last several years. Just as importantly, we are taking a significant step in the continued rebalancing of our operating businesses. Together with the sale of our Norwegian asset, we are exiting sub-scale markets tax-efficiently and at attractive prices, with the intention of refocusing that capital on existing or new markets that offer greater long-term growth and stability. This transaction should be viewed as a compelling validation of our M&A and operating strategies in Europe and is reflective of the value we're creating for shareholders in our core broadband businesses around the world." About Liberty Global Headquartered in Englewood, Colorado, Liberty Global, Inc. is an international broadband communications provider of video, voice and Internet access services, with consolidated broadband operations in 19 countries, primarily in Europe, Japan and Chile. Through its indirect wholly owned subsidiary UGC Europe, Inc., and its wholly owned subsidiaries UPC Holding B.V. and Liberty Global Switzerland, Inc., collectively Europe Broadband, Liberty Global provides video, voice and Internet access services in 13 European countries. Through Liberty Global's indirect controlling ownership interest in Jupiter Telecommunications Co., Ltd., the Company provides video, voice and Internet access services in Japan. Through the Company's indirect 80%-owned subsidiary VTR GlobalCom, S.A., it provides video, voice and Internet access services in Chile. * * * As reported in the Troubled Company Reporter on Feb 22, 2006, Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to U.S.-listed, international cable operator Liberty Global Inc. S&P said the outlook is stable. LORBER INDUSTRIES: Taps Elgort Textile as Liquidator ---------------------------------------------------- Lorber Industries of California asks the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, for permission to employ Elgort Textile Associates, Inc., as its liquidator of surplus machinery and equipment. Elgort Textile will: a. provide the Debtor with a detailed inventory of all assets to be liquidated with lot numbers; b. provide the asking price, high price and low price for each item; and c. collect all monies from the sale before release of any items from the Debtor's premises. Alan Elgort, president of Elgort Textile, tells the Court that his firm will receive a 7.5% commission from the proceeds of the sale. Mr. Elgort assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Gardena, California, Lorber Industries of California -- http://www.lorberind.com/-- manufactures texturized and knitted fabrics. The company filed for chapter 11 protection on Feb. 10, 2006 (Bankr. C.D. Calif. Case No. 06-10399). Joseph P. Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro LLP, represents the Debtor in its restructuring efforts. The Debtor's schedules show $25,580,387 in assets and $24,740,726 in liabilities. LUCENT TECH: In Talks Over Possible Alcatel Merger -------------------------------------------------- Lucent Technologies Inc. disclosed Thursday that it is exploring a possible "merger of equals" with French telecommunications network provider, Alcatel SA. The Wall Street Journal reports that combining Lucent and Alcatel would create a $33 billion trans-Atlantic equipment supplier. Merging with Lucent would reinforce Alcatel's position as the world's leading DSL equipment supplier by giving the French company broader access to the U.S. wireless-equipment market. Lucent's customer base includes communications service providers and enterprises. A "merger of equals" is important for Lucent, Dennis Berman, Sara Silver and Almar Latour at the Journal suggest, recalling that Lucent turned its back on a $23.5 billion merger deal with Alcatel four years ago over issues of how much control Alcatel would have in the merged company. About Alcatel Alcatel -- http://www.alcatel.com/-- provides communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or employees. Alcatel brings its leading position in fixed and mobile broadband networks, applications and services, to help its partners and customers build a user-centric broadband world. With sales of EURO 13.1 billion and 58,000 employees in 2005, Alcatel operates in more than 130 countries. About Lucent Headquartered in Murray Hill, New Jersey, Lucent Technologies -- http://www.lucent.com/-- designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. Lucent Tech's 8% Convertible Subordinated Debentures due 2031 carry Moody's Investors Service's B3 rating and Standard & Poor's CCC+ rating. MACREPORT.NET: Auditors Express Going Concern Doubt --------------------------------------------------- Holtz Rubenstein Reminick LLP expressed substantial doubt about The Macreport.net, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended November 30, 2005 and 2004. The auditing firm says that the Company's ability to continue in the normal course of business is dependent upon its ability to generate revenue and raise capital through the issuance of equity or debt securities. Management says that it intends to increase sales and profit margin to generate income and positive cash flow in the hopes of reducing its dependence on the issuance of equity or debt securities to fund its working capital needs. 2005 Financials For the 12 months ended Nov. 30, 2005, Macreport.net incurred a $1,831,265 net loss on $1,639,027 of total revenues. For the 12 months ended Nov. 30, 2004, the Company incurred a $1,244,997 net loss on $2,122,069 of total revenues. At Nov. 30, 2005, Macreport.net's balance sheet showed $3,061,838 in total assets and $2,147,093 in total liabilities. The Company's balance shows a $3,768,198 accumulated deficit at Nov. 30, 2005. A full-text copy of Macreport.net's latest annual report is available for free at http://ResearchArchives.com/t/s?6ec Headquartered in Melville, New York, The Macreport.net, Inc. -- http://www.macreport.net/-- is an information and media company that provides a Web-based forum for public and private issuers to communicate corporate audio news content to the business, financial and investing community through its Web site. Through content partnerships, the Company also provides Web-based financial information to professionals who need quick access to reliable corporate, industry and market intelligence. MANITOWOC CO: S&P Raises Corporate Credit Rating to BB from BB- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on diversified equipment manufacturer The Manitowoc Co. Inc., including the corporate credit rating on the company, which rose to 'BB' from 'BB-'. "The upgrade reflects the improvement in the company's operating performance and the expectations for continued reduction in leverage," said Standard & Poor's credit analyst John Sico. "Further improved prospects in performance, especially in the crane segment, are factored into the current ratings and outlook." The outlook is stable. The Manitowoc, Wisconsin-based company is a diversified equipment manufacturer with market-leading positions serving the: * crane, * food-service, and * shipbuilding markets. The company had more than $2 billion in sales and more than $500 million in debt outstanding in 2005. The ratings on Manitowoc reflect its diversified and leading global positions in several segments, including the cyclical construction and industrial end markets, as well as the more stable food-service market. However, the ratings also reflect the company's somewhat aggressive financial profile. Manitowoc manufactures equipment in three distinct segments -- cranes, food-service equipment, and midsize ships -- in which it holds broad, market-leading positions. The company also maintains good customer, product, and geographic diversity and oversees low- cost and efficient global manufacturing operations. The crane business, which accounts for more than two-thirds of company revenues, has seen a gradual improvement in operations, and it is expected to continue expanding, as construction spending generally lags the improving economy. Before the recent rebound, the construction equipment sector had been particularly affected by the severe decline in nonresidential construction spending that started in 2001, a downturn in which cranes were affected more than other construction equipment. The crane operation's sales and earnings improved in 2004 and 2005, and the heavy-duty/high- capacity crawler crane market in North America is rebounding. The segment's backlog is up significantly from last year, and the outlook for this business is that there will continue to be gradual improvement in 2006. Despite higher raw material costs, operating income margins in the crane segment rose to 7.1% in 2005, an increase from 4.6% in the prior year. The food-service segment accounts for about 20% of sales and contributes a higher proportion of operating earnings. Operating margins in the segment were steady at about 14% in 2005, though somewhat lower than in the previous year because of higher raw material prices. This segment is more focused on the replacement and renovation market than on sales to new locations. Performance in the marine business, which accounts for about 10% of sales, has been disappointing because of the run-up in raw material prices and labor costs for certain contracts. MBA BANCO: Moody's Junks Long-Term Foreign-Currency Deposit Rating ------------------------------------------------------------------ Moody's Investors Service assigned these first-time ratings to MBA Banco de Inversiones S.A.: * a bank financial strength rating of E, with a positive outlook; * long- and short-term global local-currency deposit ratings of B2 and Not Prime; and * long- and short-term global foreign-currency deposit ratings of Caa1 and Not Prime. All ratings have stable outlooks. Moody's also assigned MBA a national scale rating for foreign currency deposits of Ba1.ar, which carries a stable outlook. In addition, Moody's upgraded the national scale rating for local currency deposits to A1.ar from A2.ar. Moody's explained that the positive outlook on the bank's financial strength is based on the relatively good capitalization and improvements in MBA's earnings profile in recent years. The bank's important investment banking franchise and the expertise of its management team have benefited operations in MBA's core businesses of corporate finance, asset management, and proprietary trading. The bank's operations in Argentina also include brokerage houses and private equity. MBA is the principal business of its shareholders, and therefore Moody's believes they would be forthcoming in providing liquidity and capital assistance were the bank to face stress. Moreover, the bank's conservative risk-management policies help shield it from potential risks. However, given the investment banking nature of the bank's operations, Moody's does not assign a high probability of regulatory support to MBA's local-currency deposits, in case of systemic risk. Nevertheless, the inherent volatility of MBA's balance sheet and earnings, as well as existing uncertainties in the legal and operating Argentine environment, still constrain the ratings. The rating agency also explained that the global and national scale foreign-currency deposit ratings of the bank reflect both the foreign-currency transferability and convertibility risks. National scale ratings for Argentine banks, which carry the identifier of ".ar", rank the likelihood of credit loss on local and foreign currency obligations of issuers in a particular country relative to other domestic issuers. The national scale ratings are intended for domestic use only and are not globally comparable. Moody's national scale ratings are not opinions on absolute default risks; therefore, in countries with overall low credit quality, even highly rated credits on the national scale may be susceptible to default. MBA Banco de Inversiones is a leading investment bank based in Buenos Aires, Argentina, where it has operated since 1981 in various associations with major international investment houses. In December 2005, the bank had assets worth Ar$300.6 million and deposits up to Ar$89.3 million. These ratings were assigned: * Long-Term Global Local-Currency Deposits: B2 -- Stable outlook * Short-Term Global Local-Currency Deposits: Not Prime -- Stable outlook * Bank Financial Strength Rating: E -- Positive Outlook * Long-Term Foreign Currency Deposits: Caa1 -- Stable outlook * Short -Term Foreign Currency Deposits: Not Prime -- Stable outlook * National Scale Rating for Foreign Currency Deposits: Ba1.ar -- Stable outlook This rating was upgraded: * National Scale Rating for Local Currency Deposits: A1.ar - Stable outlook MCCANN INC: Plan Confirmation Hearing Set for April 27 ------------------------------------------------------ The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York approved the Disclosure Statement explaining the Plan of Liquidation of McCann, Inc., on March 21, 2006, proposed by Lee E. Buchwald, who serves as the Chapter 11 Trustee.. The Court determined that the Disclosure Statement contained adequate information -- the right amount of the right kind of information -- required under Section 1125 of the Bankruptcy Code. With a Court-approved Disclosure Statement in hand, Mr. Buchwald can now ask creditors to vote to accept his plan for liquidating the debtor. The Bankruptcy Court will convene a hearing at 10:00 a.m. on Apr. 27, 2006, to consider confirmation of the Debtor's Plan. Objections to the confirmation of the Plan must be filed with the Clerk of the Bankruptcy Court by April 21, 2006. Copies of the objection must be furnished to: Counsel to the Chapter 11 Trustee: Todtman, Nachamie, Spizz & Johns, PC Attn: Scott S. Markowitz, Esq. 425 Park Avenue New York, New York 10022 - and - The United States Trustees: Office of the U.S. Trustee Attn: Greg Zipes, Esq. Southern District of New York 33 Whitehall Street, 21st Floor New York, New York 10004, As reported in the Troubled Company Reporter on Feb. 9, 2006, the Chapter 11 Trustee proposes to fund payments due under the Plan from the proceeds of the liquidation of all of the Debtor's assets, the collection of accounts receivable and the proceeds of settlement proceedings and contested matters. Treatment of Claims Holders of allowed administrative claims will be paid in full on the later to occur of the effective date of the Plan or the date the order allowing the administrative claim becomes final. The Trustee estimates administrative claim payments will approximate $550,000, exclusive of the $490,000 previously awarded by the Bankruptcy Court to professionals. Administrative claim holders must file requests for payment within 45 days after confirmation of the Plan. Priority tax claims will be paid in full on the earlier of effective date of the Plan or the date the claim becomes an allowed Priority Tax Claim. Priority tax claims consist of the claims of: -- the Connecticut Department of Revenue for $90,000; -- the New York State Department of Taxation and Finance for $4,000; and -- the City of New York Department of Finance for $23,701. The Internal Revenue Service has issued a notice of deficiency asserting a claim of $18,752 for tax year 2003. However, the IRS has not filed a proof of claim. The $99,000 claim of the Debtor's landlord for rent will be paid in full on the effective date of the Plan. Priority claims asserted by the Debtor's Union Pension and Welfare Funds, totaling $5,053, will be paid in full on the effective date of the Plan. Each holder of a General Unsecured Claim will receive a pro rata share of any cash remaining after all other claims are paid in full. The Trustee will pay unsecured creditors on the later of 30 days after the effective date of the Plan; or within 15 days after their claims are recognized as allowed unsecured claims. The Trustee estimates that the Debtor's estate will have from $1.5 million to $1.6 million in excess cash available to settle approximately $47 million of general unsecured claims. This would result in recoveries of approximately 3.3% for unsecured claim holders. Equity holders will get nothing under the Plan. The Reorganized Debtor will be dissolved upon completion of all distributions contemplated under the Plan. A copy of Mr. Buchwald's 45-page Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060208023554 Headquartered in New York, New York, McCann, Inc., is a commercial interior general contracting company. On April 15, 2004, a group of creditors filed an involuntary Chapter 7 petition against McCann, Inc. On June 23, 2004, the Debtor exercised its right under Sec. 706(a) of the Bankruptcy Code to convert its bankruptcy case to a Chapter 11 case, and an order for relief was entered on June 25, 2004 (Bankr. S.D.N.Y. Case No. 04-12596). On July 22, 2004, the court appointed Lee E. Buchwald to serve as Chapter 11 Trustee. Mr. Buchwald hired Scott S. Markowitz, Esq., at Todtman, Nachamie, Spizz & Johns, P.C., as his counsel. Clifford A. Katz, Esq., at Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP, represents the Debtor in its restructuring efforts. MEDICALCV INC: Negative Cash Flows Prompt Going Concern Doubt ------------------------------------------------------------- MedicalCV, Inc., reported its financial results for the quarter ended Jan. 31, 2006, to the Securities and Exchange Commission on March 20, 2006. For the three months ended Jan. 31, 2006, MedicalCV incurred a $7,589,765 net loss from a $1,864,686 net loss for the three months ended Jan. 31, 2005. Sales and marketing expenses in the quarter ended Jan. 31, 2006, were $295,742 compared to $97,568 in the quarter ended Jan. 31, 2005. For the quarter ended Jan. 31, 2006, the Company reported $12,602,096 of cash and cash equivalents from $97,568 for the same period in 2005. MedicalCV did not report any revenues in its latest quarterly report. The Company says that it has discontinued sales of its heart valve and is focusing all of its resources on the development and introduction of its AtriLaze Surgical Ablation System. At Jan. 31, 2006, MedicalCV's balance sheet showed $14,031,248 in total assets and $3,682,457 in total liabilities. As of Jan. 31, 2006, the Company reported a $44,628,003 accumulated deficit. The Company also reported a $10,348,791 positive equity at Jan. 31, 2006, from a $18,911,983 equity deficit at April 30, 2005. Going Concern Doubt PricewaterhouseCoopers LLP expressed substantial doubt about MedicalCV Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended April 30, 2005 and 2004. The auditing firm pointed to MedicalCV's losses, negative cash flows from operations and difficulty in obtaining additional funds to finance its working capital and capital expenditure needs. MedicalCV says that although it raised funds through the sale of convertible preferred stock in the last quarter of 2005 and the exercise of warrants to purchase common shares in the third quarter of 2006, the Company anticipates that development of its new products will require additional capital by the first quarter of fiscal year 2008. MedicalCV is planning to seek additional debt or equity financing as it continues development of new products. However, the Company may not be able to obtain financing on acceptable terms or at all. "If the Company is unable to obtain additional financing, it will be required to significantly revise its business plans and drastically reduce operating expenditures that it may not be able to develop its products, gain market share or respond to competitive pressures or unanticipated requirements which could seriously harm its business, financial position and results of operations, " management says in its latest quarterly report. A full-text copy of MedicalCV's latest quarterly report is available for free at http://ResearchArchives.com/t/s?6eb Headquartered in Inver Grove Heights, Minnesota, MedicalCV, Inc. -- http://www.medicalcvinc.com/-- is a cardiothoracic surgery device manufacturer. Previously, its primary focus was on heart valve disease. It developed and marketed mechanical heart valves known as the Omnicarbon 3000 and 4000. In November 2004, after an exhaustive evaluation of the business, MedicalCV decided to explore options for exiting the mechanical valve business. The Company intends to direct its resources to the development and introduction of products targeting treatment of atrial fibrillation. MGM MIRAGE: S&P Assigns BB Rating to $750 Million Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to MGM MIRAGE's: * $500 million 6.75% senior notes due April 1, 2013; and * $250 million 6.875% senior notes due April 1, 2016. Proceeds from the offerings will be used to repay amounts outstanding under the company's revolving credit facility that were incurred to fund the acquisition of Mandalay Resort Group in April 2005. At the same time, Standard & Poor's affirmed its ratings on the Las Vegas-based gaming company, including its 'BB' corporate credit rating. The outlook is stable. Consolidated debt outstanding at Dec. 31, 2005, was about $12.3 billion. Standard & Poor's expects MGM's: * quality assets, * leadership position, * positive market momentum, and * good operating track record to enable continued cash flow growth over the intermediate term. However, the company's aggressive financial policy is expected to result in debt leverage remaining at a high level for the rating during this period. NS REPACK: S&P Downgrades $94 Million Notes' Rating to B from B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on NS Repack Ltd., a single-issue synthetic ABS transaction, to 'B' from 'B+' and affirmed its ratings on three CMBS securities after the March 23, 2006, lowering and subsequent withdrawal of the ratings on Royal Indemnity Co. The lowered rating on the NS Repack transaction reflects the possibility that claims will be filed given the deterioration of the credit quality of the underlying collateral, as well as some uncertainty that full and timely payment of claims will be made. Standard & Poor's indicated in a June 13, 2005 press release ("NS Repack Ltd. Rating Lowered, Off Watch Negative; Tie To Royal Indemnity Co. Cited") that Royal had decided not to participate in Standard & Poor's revised financial enhancement rating analysis. Consequently, Standard & Poor's was unable to assess Royal's willingness to make immediate and uncontested payments under the policy. In the absence of a financial enhancement rating analysis, Standard & Poor's analyzed the actual insurance and reinsurance policies issued in connection with the NS Repack transaction and gained comfort from the strength of the policy language contained therein. The 'BB' corporate credit and financial strength ratings assigned to Royal (prior to their withdrawal), as well as the type of policy (debt service insurance) supporting the transaction, were also taken into consideration before lowering the rating on NS Repack Ltd. to 'B'. The CMBS affirmations follow an examination of the value of the real estate collateral underlying each transaction. The ratings on these transactions and NS Repack Ltd. were lowered on various dates in 2005 to resolve CreditWatch placements that followed discussions with Royal management regarding its obligations under residual value insurance policies (RVI) due to its lack of a financial enhancement rating. The CreditWatch placements were resolved after examining the value of the underlying collateral in each transaction. The valuation of the underlying collateral in each transaction continues to support the ratings assigned to the CMBS transactions. While Royal is no longer publicly rated, the balloon risk continues to be mitigated by the RVI policy. Standard & Poor's expects to be able to maintain a non-public credit opinion on Royal for the foreseeable future as a natural extension of the surveillance it will perform for the purposes of the Royal & Sun Alliance Insurance PLC group rating. Details concerning each CMBS transaction are: -- In the CVS Credit Lease Pass Through Certificates transaction, Royal reinsures a RVI provided by Financial Structures Ltd. The RVI provider is obligated to pay the balloon balance of the class A2 certificate at maturity in the event the borrower fails to do so. -- The Short Term Asset Receivables Trust certificates are collateralized by two credit lease loans that are secured by the assignment of a lessor's interest in triple net bondable leases guaranteed by Beckman Coulter Inc. (BBB/Negative/NR) on two research and development complexes. The loans each have balloon balances ($53.2 million in the aggregate) that are guaranteed under an RVI policy by Financial Structures Ltd., which is in turn guaranteed by Royal. -- The North First Credit Lease Trust certificates are collateralized by a first mortgage and assignment of ase encumbering the Lincoln Technology Center in San Jose, California. The property, which consists of four, class A office/R&D buildings, is leased to Sun Microsystems Inc. (BB+/Stable/A-3) under a triple net lease. The mortgage loan has a balloon balance of $40 million at maturity, which is insured by an RVI policy provided by Financial Structures Ltd. and reinsured by Royal. Rating lowered: NS Repack Ltd. $94 million notes Rating Class To From ----- -- ---- Notes B B+ Ratings affirmed: CVS Credit Lease Pass Through Certificates Class Rating ----- ------ A2 B+ Short Term Asset Receivables Trust Net Lease Pass-Through Certificates Series BC 2000A Class Rating ----- ------ Certs. BB North First Credit Lease Trust 2001-CTL1 Credit Lease-Backed Pass-Through Certificates Class Rating ----- ------ Certs. B O-CEDAR HOLDINGS: Chapter 7 Trustee Taps RSI as Collection Agent ---------------------------------------------------------------- Jeoffrey L. Burtch, the chapter 7 Trustee overseeing the liquidation of O-Cedar Holdings, Inc. and its debtor-affiliates' estates, asks the U.S. Bankruptcy for the District of Delaware for permission to employ Recovery Services Inc., as his collection agent, nunc pro tunc to Feb. 15, 2006. Mr. Burtch tells the Court that he has obtained default judgments in eleven adversary proceedings. Mr. Burtch wants RSI to assist him in collecting on those default judgments as well as other judgments entered in adversary proceedings where collection services are needed. Larry Waslow, Secretary & Treasurer of RSI, tells the Court that the firm will receive 30% of each judgment recovery received by the trustee. Mr. Waslow assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Springfield, Ohio, O-Cedar Holdings, Inc., through its debtor-affiliate, manufactures brooms, mops, and scrub brushes for household and industrial use. The Company filed for chapter 11 protection on August 25, 2003 (Bankr. Del. Case No. 03- 12667). Curtis A. Hehn, Esq., at Pachulski Stang Ziehl Young & Jones, represents the Debtor. Bradford J. Sandler, Esq., represents the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed over $50 million in both assets and debts. On May 26, 2004, the cases were converted to chapter 7 and Jeoffrey L. Burtch was appointed trustee. O'SULLIVAN IND: Panel Hires Chanin as Advisor on Final Basis ------------------------------------------------------------ As reported in the Troubled Company Reporter on Dec. 16, 2005, Felicia S. Turner, the U.S. Trustee for Region 21, asked the Court to strike its order authorizing the Official Committee of Unsecured Creditors of the Debtors to retain Chanin Capital Partners, LLC, as financial advisor. The U.S. Trustee suggested that Chanin could seek compensation by application for any fees during the fee-tail period provided that the application state with particularity the: -- the services Chanin provided to commencement of the fee- tail period, which resulted in a definitive agreement after the fee-tail period commenced; and -- the benefit that was conferred on the Debtors' estates by the services. Committee Responded On behalf of the Creditors Committee, Michael H. Goldstein, Esq., at Stutman, Treister & Glatt, P.C., in Los Angeles, California, asserted that the terms of Chanin's Engagement Letter are fair and comparable to market rates. According to Mr. Goldstein, because Chanin's compensation and indemnification provisions reflect market standards, the proposed engagement of Chanin by the Creditors Committee is reasonable and standard under the circumstances. The Creditors Committee asked the Court to overrule the U.S. Trustee's Objections. Indemnification The Creditors Committee has agreed to indemnify Chanin for any liabilities that arise in connection with the services Chanin performs on behalf of the Committee, except for liabilities found to result from Chanin's gross negligence or willful misconduct. Although the U.S. Trustee objects to the Indemnification Provision as being inconsistent with Chanin's fiduciary duties to the Committee, it cites nothing in support of its objection, Mr. Goldstein tells the Court. Mr. Goldstein explained that Chanin ordinarily insists including an indemnification provision in its retention agreements. Without that provision, Chanin would require different terms for the engagement. Mr. Goldstein also notes that indemnification provisions are now common in the restructuring market for financial advisors. * * * The U.S. Bankruptcy Court for the Northern District of Georgia authorized the Official Committee of Unsecured Creditors, on final basis, to retain Chanin Capital Partners, LLC, as its financial advisor, nunc pro tunc to Oct. 27, 2005. Chanin Capital Partners LLC will not be indemnified for any actions arising from its gross negligence, willful misconduct and breach of fiduciary duty, if any, Judge Mullins rules. Chanin will be paid for its services, including any payment of the Deferred Fee during the 18-month period following the effective date of Chanin's termination. The Court authorizes and directs the Debtors to pay Chanin a $125,000 Monthly Advisory Fee. About O'Sullivan Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). Joel H. Levitin, Esq., at Dechert LLP, represents the Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C., represent the Official Committee of Unsecured Creditors. On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) OCWEN RESIDENTIAL: Moody's May Downgrade B3 Certificate Rating -------------------------------------------------------------- Moody's Investors Service placed under review for possible upgrade one subordinate certificate and placed on review for possible downgrade one subordinate certificate, issued by Ocwen Residential MBS Corp., in 1999. The certificates are secured by seasoned re- performing loans. The one subordinate certificate in series 1999-R1 being reviewed for possible upgrade is benefiting from a large build-up of credit enhancement relative to expected future losses in the underlying mortgage pools. The one subordinate certificate being reviewed for possible downgrade suffers primarily from the performance of the underlying loans, with cumulative losses exceeding our original expectations. As a result the credit enhancement levels relative to expected future losses in the underlying pool appear to be low for their respective current rating level. On review for upgrade: * Series 1999-R1; Class B1-F, current rating Aa2, under review for possible upgrade; On review for downgrade: * Series 1999-R1; Class B4-F, current rating B3, under review for possible downgrade. OMEGA HEALTHCARE: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Omega Healthcare Network, Inc. 1717 West Howard Street Chicago, Illinois 60602 Bankruptcy Case No.: 06-03058 Chapter 11 Petition Date: March 24, 2006 Court: Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Scott R. Clar, Esq. Crane Heyman Simon Welch & Clar 135 South Lasalle, Suite 3705 Chicago, Illinois 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Capital One $1,365 P.O. Box 26074 Richmond, VA 23260 Lavelle Legal Services $1,151 501 West Colfax Street Palatine, IL 60067 Watson Rounds $1,000 5371 Kietzke Lane Reno, NV 89511 ON SEMICONDUCTOR: S&P Puts B+ Rating on $639.1 Million Term Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating and other ratings on Phoenix, Arizona-based ON Semiconductor Corp., and assigned its 'B+' rating to the company's amended and restated $639.1 million term loan. The loan is assigned a '4' recovery rating, indicating a marginal (25%-50%) recovery of principal in the event of a payment default or bankruptcy scenario. The rating outlook is stable. The new term loan replaces an earlier term loan, and reduces the company's interest expense. "The ratings on ON Semiconductor Corp. reflect its improved, albeit still limited, debt-protection measures following a series of debt- and equity-based refinancing actions; the company's position as a supplier of commodity semiconductors in a challenging operating environment; adequate operating liquidity; and expectations that operating profitability, cash flows, and liquidity will remain near recent levels," said Standard & Poor's credit analyst Bruce Hyman. ON Semiconductor is a major supplier of standard logic and analog integrated circuits and discrete semiconductors, holding mid- single-digits percentage shares of several commodity markets; industry conditions track the global economy, with little exposure to any one customer or market. The company has reduced its operating costs through relocation to low-cost geographies; nevertheless, commodity suppliers rarely can capture the savings over the long term, although these cost reductions contribute to competitiveness. The company has refinanced essentially all of its high-coupon cash-pay debt issues in a series of transactions since 2004, which has substantially trimmed its once-onerous interest burden. EBITDA interest coverage is now about 4x, and likely will remain in that area over the intermediate term. Debt levels (including capitalized operating leases and tax-adjusted pensions) remain high, at about $1 billion or 4x the past 12 months' EBITDA, and are unlikely to decline materially over the near to intermediate term. Still, this marks an improvement from the company's 7x leverage in 2003, or 9x in 2002. OPTINREALBIG.COM: Wants Plan-Filing Period Extended Until May 5 --------------------------------------------------------------- OptInRealBig.com, LLC, and its owner, Scott Allen Richter, ask the U.S. Bankruptcy Court for the District of Colorado to extend, until May 5, 2006, the period within which they have the exclusive right to file a chapter 11 plan of reorganization. The Debtors also want to extend, until July 5, 2006, the period within which they have the exclusive right to solicit acceptances for that plan. As reported in the Troubled Company Reporter on Aug. 18, 2005, the Debtors asked the Court to dismiss their bankruptcy cases after entering into settlement agreements with Microsoft Corporation and American Family Mutual Insurance Co. The Debtors reminded the Court that they sought protection under chapter 11 to stay 13 legal actions filed against them by Microsoft and American Family. The Debtors tell the Court that the motion to dismiss remains pending. The Debtors want to preserve their exclusive periods until reasonable points in time following any ruling on the motion to dismiss. Headquartered in Westminster, Colorado, OptinRealBig.com, LLC, is an e-mail marketing company. The Company filed for chapter 11 protection on March 25, 2005 (Bankr. D. Colo. Case No. 05-16304). John C. Smiley, Esq., at Lindquist & Vennum P., LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $50 million to $100 million. PORTUS ALTERNATIVE: Mr. Justice Campbell Enters Bankruptcy Order ---------------------------------------------------------------- Mr. Justice Colin L. Campbell of the Ontario Superior Court placed Portus Alternative Asset Management Inc. in bankruptcy on Friday, March 24, 2006. Bloomberg News reports that the with a formal bankruptcy proceeding in place, Portus' investors move closer toward recovering some of the CA$800 million they placed in the hedge fund. Pursuant to the order, Judge Campbell named KPMG, LLP as Trustee for Portus' estate. This will allow KPMG to liquidate Portus and distribute the proceeds to its creditors. Joe Schneider, writing for Bloomberg News, says that KPMG has recovered an estimated CA$691 million to CA$772 million of Portus' assets. CBC News reports that Manulife Financial is Portus' biggest creditor. Manulife has assured its clients that they won't lose money from Portus and guaranteed the recovery of their investments. KPMG anticipates holding the first meeting of Portus' creditors on June 21, 2006 in Toronto. The Trustee can be reached at: KPMG Inc. Attn: B. Uchikata 199 Bay Street, Suite 3300 Toronto, ON M5L 1B2 Canada The Ontario Superior Court had earlier ordered on March 21, 2006 that investors of Portus' Alternative Asset Management Inc.'s Market Neutral Preservation Fund do not have to file bankruptcy claims to recover their money. Mr. Justice Campbell agreed that the MNPF investors may get their money outside of bankruptcy since the investments were segregated from Portus' other assets. "The MNPF Investors are entitled to the funds in the MNPF/Co PAM Account in the name of PAAM as trustee and to the proceeds of the MNB Trust at RBC that can be segregated as being for the account of MNPF Investors," Mr. Justice Campbell explained in his March 21, 2005, reasons for decision, posted at http://ResearchArchives.com/t/s?6e1 As reported in the Troubled Company Reporter on March 24, 2006, Portus, and its principals, Boaz Manor and Michael Mendelson, face lawsuits filed by the Ontario Securities Commission. The OSC accused Portus of misleading its investors and violating a host of Canadian securities law. In a compliance review conducted last year, the OSC determined that Portus maintained inadequate policies, procedures and internal controls in several key areas of its business. The OSC alleged that the deficiencies were part of Portus' efforts to conceal the illegality of the investments it was offering. On March 4, 2005, the OSC appointed KPMG LLP as receiver for Portus' assets. About Portus Alternative Portus Alternative Asset Management Inc.-- http://www.kpmg.ca/portus-- is a registered investment counsel/portfolio manager and limited market dealer. KPMG Inc. acts as Portus' receiver of all its property, undertakings and assets. PREFERREDPLUS TRUST: S&P Lowers $31.2MM Certificates' Rating to BB ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the $31.2 million corporate bond-backed certificates issued by PreferredPLUS Trust Series CTR-1 to 'BB' from 'BB+' and removed it from CreditWatch, where it was placed with negative implications March 15, 2006. The rating action reflects: * the March 16, 2006, lowering of the rating on the underlying securities; * the $31.2 million 8.00% notes due Dec. 15, 2019, issued by Cooper Tire & Rubber Co.; and * its subsequent removal from CreditWatch negative. PreferredPLUS Trust Series CTR-1 is a swap-independent synthetic transaction that is weak-linked to the underlying collateral, the $31.2 million Cooper Tire & Rubber Co. 8.00% notes. RED TAIL: Exclusive Plan-Filing Period Extended to April 15 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon extend, until Apr. 15, 2006, the period within which Red Tail Canyon, LLC, has the exclusive right to file a chapter 11 plan. As reported in the Troubled Company Reporter on Feb. 13, 2006, the Debtor, along with GECCMC 2002-2 Foster Road LLC, its creditor, asked the Court for the extension, citing the need to incorporate a stipulation regarding the GECCMC loan into plan. GECCMC Loan GECCMC is the holder of a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filings dated July 23, 2002, made by the Debtor in favor of Deutsche Banc Mortgage Capital, L.L.C. The obligation in the Loan Documents total $12.5 million and are currently in default due to the Debtor's failure to pay monthly installments since May 1, 2005. GECCMC has a perfected, first-priority interest in the Debtor's: * 100-unit apartment complex known as Red Tail Apartments, * all real and personal property related to the apartment, and * income from the apartment. GECCMC's Objections The Debtor told the Court that GECCMC complained that it was undersecured but the Debtor has disputed that contention. The Debtor said that GECCMC then objected to its request to use the Cash Collateral as well as its applications to employ professionals. Further, the Debtor related, GECCMC also filed a Motion for Relief from the Automatic Stay. The Debtor said that a hearing was held on Nov. 10, 2005, on GECCMC's objection to the use of cash collateral. Thereafter, the Debtor reminded the Court that it entered into a Stipulated Cash Collateral Order and Stipulated Order for Relief from Automatic Stay with GECCMC, which settled all issues with GECCMC. Stipulated Order Under the Stipulated Order, the Debtor stated, it is required to pay GECCMC on a discounted basis on or before Apr. 1, 2006. If the Debtor manages to pay its obligations on time, then, the Debtor relates, it intends to dismiss its bankruptcy case. Otherwise if the debt is not paid by the deadline, the Debtor relates, GECCMC may have relief from the automatic stay and proceed to repossess all of the property and cash collateral by recording a deed and accepting a bill of sale that the Debtor has executed and deposited in trust with GECCMC's attorneys. The Debtor disclosed that the Court ordered that the terms of the Stipulated Order be incorporated in its plan. No Way But Out The Debtor told the Court that it had already prepared a plan and disclosure statement and was ready to file both on the Dec. 19, 2005, due date. However, the Debtor related, because of the Stipulated Order, the need to file a plan and disclosure statement is obviated. The Debtor contended that under the terms of the Stipulated Order, whatever the Debtor does or does not do, the case will end. Headquartered in Portland, Oregon, Red Tail Canyon LLC owns and operates the Red Tail Canyon townhouse apartments located in South Aspen Summit Drive, Multnomah County, Portland, Oregon. The Company filed for chapter 11 protection on Sept. 19, 2005 (Bankr. D. Ore. Case No. 05-41235). J. Stephen Werts, Esq., at Cable Huston Benedict Haagensen & Lloyd LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. REVLON INC: Completes $110 Million Class A Rights Offering ---------------------------------------------------------- Revlon, Inc. (NYSE: REV) reported the completion of the $110 million rights offering that the Company launched on Feb. 17, 2006. Revlon also reported that all of the 15,885,662 shares of Revlon, Inc. Class A common stock offered to shareholders (other than MacAndrews & Forbes Holdings Inc. and its affiliates) in the rights offering were fully subscribed for by the public shareholders at the $2.80 per share offering price. The Company indicated that there had been strong demand for the shares in the rights offering, noting that the public subscribers (not including M&F, which had previously agreed to acquire its pro-rata portion directly in a private placement from the Company) had sought to purchase approximately 40 million shares of Revlon Class A common stock, which was substantially in excess of the 15,885,662 shares offered to be sold to public shareholders in the rights offering. "I am delighted with this demonstration of support by our shareholders, as the Company continues to make progress on taking the actions necessary to strengthen our business and capital structure for the future," Revlon President and CEO Jack Stahl stated. Because the 15,885,662 shares were fully subscribed for by the public, M&F was not required, pursuant to its agreement to back stop the rights offering, to purchase any shares in excess of its pro-rata portion. Accordingly, M&F purchased a total of 23,400,052 shares of Revlon's Class A common stock at the same $2.80 per share price in a private placement directly from Revlon. These shares represented the number of shares that M&F would otherwise have been entitled to purchase pursuant to its basic subscription privilege in the rights offering (which was approximately 60% of the shares offered in the rights offering). M&F, which is wholly owned by Ronald O. Perelman, is Revlon's majority stockholder. As a result of these transactions, Revlon issued a total of 39,285,714 new shares of its Class A common stock, increasing the number of outstanding shares of Revlon's Class A common stock to 380,041,688 and increasing the total number of shares of common stock outstanding, including the Company's existing 31,250,000 shares of Class B common stock, to 411,291,688 shares. Following the completion of these transactions, M&F owns approximately 56% of Revlon's Class A common stock outstanding and approximately 60% of Revlon's total common stock outstanding, which shares represent approximately 76% of the combined voting power of such shares. The shares sold to M&F were sold in reliance on Rule 506 under the Securities Act of 1933, as amended. The issuance of shares to M&F was not registered under the Securities Act of 1933, as amended, and such shares may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. The Company also announced that, on April 21, 2006, Revlon Consumer Products Corporation, Revlon's wholly-owned operating subsidiary, will redeem approximately $109.7 million aggregate principal amount of its 8-5/8% Senior Subordinated Notes due 2008, in satisfaction of the applicable requirements under RCPC's bank credit agreement, at a redemption price of 100% of the principal amount of such Notes, plus accrued and unpaid interest up to, but not including, the redemption date. On March 22, 2006, a copy of the irrevocable notice of redemption was mailed to the record holders of the Notes being redeemed by the trustee under the indenture governing the Notes: U.S. Bank National Association 60 Livingston Avenue St. Paul, Minnesota 55107, About Revlon Revlon is a worldwide cosmetics, skin care, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. Websites featuring current product and promotional information can be reached at http://www.revlon.com/http://www.almay.com/ http://www.vitalradiance.com/and http://www.mitchumman.com/ Corporate and investor relations' information can be accessed at http://www.revloninc.com/ The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). At Dec. 31, 2005, Revlon, Inc.'s balance sheet showed a $1,095,900,000 equity deficit compared to a $1,019,900,000 deficit at Dec. 31, 2004. * * * As reported in the Troubled Company Reporter on Mar. 06, 2006, Standard & Poor's Ratings Services revised its outlook on Revlon Consumer Products Corp. to stable from negative. At the same time, Standard & Poor's affirmed all of its ratings on Revlon, including its 'B-' corporate credit rating. About $1.4 billion of debt is affected by this action. RIVIERA HOLDINGS: S&P Places B Corporate Credit Rating on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Las Vegas-based casino owner and operator Riviera Holdings Corp., including its 'B' corporate credit rating, on CreditWatch with developing implications. The CreditWatch listing follows the company's announcement that it has resumed previously initiated discussions with a certain investor group regarding its possible acquisition of Riviera at a price of $17 per share. This information follows the announcement by the company on March 8, 2006, that discussions between the Special Committee of Riviera's Board of Directors and the previously mentioned group of investors to acquire Riviera had been terminated due to a failure to agree upon an acquisition price. This investor group recently acquired 1 million shares of common stock from Riviera's Chief Executive Officer, William Westerman, and had initiated discussions to buy the remainder of the company. There continues to be questions about Riviera's long-term operating strategy given its pursuit of strategic alternatives in 2005. In resolving its CreditWatch listing, Standard & Poor's will continue to monitor developments associated with a potential acquisition of the company. While an acquisition of the company continues to remain uncertain and as the company may not provide ongoing guidance relative to its progress, Standard & Poor's may decide to resolve the CreditWatch listing at a later date if it appears a transaction is not likely to occur. ROYAL & SUN: S&P Lowers Ratings to BB & Holds Outlook at Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit and insurer financial strength ratings on Royal & Sun Alliance Insurance Group PLC's U.S. insurance operations (RSA USA) to 'BB' from 'BB+'. The outlook remains negative. At the same time, the ratings were withdrawn at the request of the companies' management. "The downgrade reflects the reduced appetite of RSA USA's parent to provide the U.S. operations with additional capital should the need arise," said Standard & Poor's credit analyst Tom E. Thun. RSA USA effectively went into run-off in 2005 following the sale of its nonstandard auto business. Standard & Poor's expects RSA USA to continue to meet its policyholder obligations over the near term. The companies' statutory surplus at year-end 2005 totaled $834 million, supporting net loss reserves of $3.4 billion. Of these reserves, approximately $540 million is related to asbestos & environmental exposures, which are long tail and notoriously volatile. The negative outlook continues to reflect the extent of the residual reserving risk at RSA USA and the companies' weak prospective financial flexibility. Because of the complexities associated with the run-off of RSA USA's book of business, Standard & Poor's believes that management will continue to be faced with challenges. SEARS HOLDINGS: Reports Fourth Quarter and Full Year 2005 Results ----------------------------------------------------------------- Sears Holdings Corporation (Nasdaq: SHLD) reported its Annual Report on Form 10-K for the fiscal year end Jan. 28, 2006, to the Securities and Exchange Commission on Mar. 14, 2006. Total revenues increased $10.1 billion to $16.1 billion for the 13-week period ended Jan. 28, 2006, compared to total revenues of $6.0 billion for the 13-week period ended Jan. 26, 2005. Full year fiscal 2005 revenues were $49.1 billion compared to $19.8 billion for fiscal 2004. The increase during the 13 weeks ended Jan. 28, 2006, was primarily attributable to the addition of Sears revenues of $10.3 billion partially offset by a $2 million decline in Kmart's revenues, due to a reduction in the total number of Kmart stores in operation. During the 13-week period ended Jan. 28, 2006, Kmart comparable store sales increased 0.9% over the 13-week period ended Jan. 26, 2005. The increase in Kmart comparable store sales for the quarter was the first increase since the second quarter of 2001 and was primarily due to increased sales in apparel and home products. Full fiscal year 2005 includes $30.0 billion of revenues related to Sears, representing revenues from Mar. 25, 2005, partially offset by a $7 million decline in Kmart's revenues due to a reduction in the total number of Kmart stores in operation. Sears Domestic sales declined 6.1% for the 13 weeks ended Jan. 28, 2006, compared to the 13 weeks ended Jan. 26, 2005. The decline was due to a 12.2% decrease in domestic comparable store sales partially offset by an increase in the total number of Sears stores and strong home services sales. The decline in Sears Domestic comparable store sales reflects efforts initiated in 2005 to improve gross margin by reducing reliance on certain promotional events and weak apparel sales resulting from weaker than anticipated customer response to fashion offerings within the full-line stores. Operating income was $1.5 billion for the 13 weeks ended Jan. 28, 2006, compared to $472 million for the 13 weeks ended Jan. 26, 2005. The increase in operating income was primarily due to the addition of $737 million of Sears operating income and a $317 million gain on the sale of business, reflecting a minority interest gain on the sale of Sears Canada's Credit and Financial Services business in November of 2005. The gain had no impact on Holdings' net income as its entire impact was offset by increased minority interest expense. Operating income was $2.1 billion for fiscal year 2005 as compared to $1.8 billion for fiscal year 2004. Fiscal 2005 included the addition of $1.4 billion in Sears operating income generated subsequent to Mar. 24, 2005, which was offset by the collective impact of $906 million less in gains on the sale of assets realized by Kmart in the current year and, to a lesser degree, a $148 million decline in Kmart operating income, including restructuring charges of $54 million. Holdings' operating income for fiscal 2005 also included the $317 million gain on sale of business, reflecting a minority interest gain on the sale of Sears Canada's Credit and Financial Services business in November 2005. The Company's cash and cash equivalents balance increased from $3.4 billion at Jan. 26, 2005, to $4.4 billion at Jan. 28, 2006, including $664 million at Sears Canada. Holdings generated approximately $2.3 billion in operating cash flows during fiscal 2005. The sale by Sears Canada of its Credit and Financial Services business generated $2 billion in proceeds, of which the Company retained $1.2 billion. Significant uses of cash in 2005 included the cash outflow associated with the merger ($1.0 billion), paydown of debt ($815 million), share repurchases ($590 million) and pension contributions ($260 million). At Jan. 28, 2006, Holdings had $3.6 billion available under its five- year credit agreement. Total debt was $3.2 billion (excluding capital lease obligations) at 2005 fiscal year end. Holdings' inventory level at Jan. 28, 2006, was approximately $9.1 billion. As of the end of the prior year period, the pro forma combined inventory on a FIFO basis for Sears and Kmart was approximately $9.3 billion. Merchandise payables were $3.5 billion at Jan. 28, 2006, as compared to $3.6 billion for Sears and Kmart combined as of Jan. 26, 2005. During the fiscal year ended Jan. 28, 2006, the Company spent $546 million on capital expenditures compared to $230 million and $868 million spent by Kmart and Sears, respectively, during fiscal 2004. Current year spending excludes approximately $40 million of capital expenditures made by Sears during the period from Jan. 30, 2005 through Mar. 24, 2005. Sears Holdings Corporation -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full- line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as one of the leading retailers of tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. * * * As reported in the Troubled Company Reporter on Dec. 30, 2005, Moody's Investors Service assigned a speculative grade liquidity rating of SGL-1 to Sears Holdings Corporation and affirmed the long-term ratings of the company and its subsidiaries with a stable rating outlook. Ratings affirmed: Sears Holdings Corp.: * Corporate family rating at Ba1 Sears Roebuck Acceptance Corp.: * Senior secured bank facility at Baa3 * Senior unsecured notes at Ba1 Rating assigned: * Speculative grade liquidity rating of SGL-1 The SGL-1 speculative grade liquidity rating is based on: * Sears Holdings' very good liquidity that reflects significant cash balances; * revolving credit availability; and * readily salable assets, including non-core brands and extraneous real estate, a sizeable amount of which is valued below market as a result of Kmart's significant post-Chapter 11 rebase of its pre-petition real estate portfolio. Sears Holdings' very good liquidity is a key positive rating factor underpinning the company's Ba1 corporate family rating. SCHOLASTIC CORP: S&P Lowers Corp. Credit Rating to BB+ from BBB- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Scholastic Corp., including the corporate credit rating, to 'BB+' from 'BBB-'. The rating outlook is negative. New York-based Scholastic is a leading publisher and distributor of children's books. Total debt as of Feb. 28, 2006, was $572 million. The downgrade reflects weak operating performance in the fiscal third quarter ended Feb. 28, 2006, and revised earnings guidance for the fiscal year ending May 31, 2006, resulting in a lower- than-anticipated increase in full-year earnings. Standard & Poor's has concerns regarding the company's increasing business risk and uncertain long-term growth prospects. "The speculative-grade ratings reflect Scholastic's deteriorating business profile and somewhat volatile operating performance," said Standard & Poor's credit analyst Hal F. Diamond. "These weaknesses are partially offset by the company's niche position as a children's book publisher and seller and by its moderate capital structure." Scholastic has a significant market position in the distribution of children's books in elementary schools through book clubs and fairs. SCHOOL SPECIALTY: Moody's Withdraws Ratings at Company's Request ---------------------------------------------------------------- Moody's Investors Service withdrew the ratings of School Specialty Inc., upon the company's request. Following the termination of the proposed go private recapitalization of the company led by Bain Capital in November 2005 and the fact the company does not currently have any publicly rated debt, the company no longer wishes to maintain its current public ratings. These ratings have been withdrawn: * Corporate Family Rating of B2; * Speculative Grade Liquidity Rating of SGL-3. School Specialty, Inc., headquartered in Greenville, Wisconsin, is the largest provider of supplemental educational products and equipment to the pre-kindergarten through twelfth grade educational markets in the United States and Canada. Its products are sold via its catalogue, ecommerce websites, and sales force. Total revenues for the fiscal year ended April 30, 2005 were approximately $1.0 Billion. SEA CONTAINERS: 10-K Filing Delay Prompts Moody's Rating Review --------------------------------------------------------------- Moody's Investors Service placed all ratings of Sea Containers Ltd., under review for possible downgrade -- senior unsecured rating at B3. The review was prompted by the company's disclosure that it would not file its Form 10-K until it completes the testing of asset impairments, as well as the uncertainty surrounding the timing of the proposed sale of Silja Oy Ab and the other ferry assets. Moody's review will focus on the company's progress on the previously announced sale of Silja Lines, particularly the amount of proceeds likely and the timing of the sale. Scheduled debt maturities for 2006 are approximately $263 million and Moody's believes that some portion of the proceeds from sale of Silja Lines will likely be needed to meet the scheduled maturities. Also factored in the review will be Sea Containers' ability to file its Form 10-K in a timely manner, and the level of write- downs and the cash flow impact related to its previously announced restructuring of the ferry and container businesses. As well, the impact on Sea Container's cash flow from the pending arbitration between Sea Containers and its partner in GE SeaCo will be examined. As Sea Container's business composition will differ considerably should the sale of the Silja Lines be completed, Moody's will also evaluate the level and predictability of the cash flow of Sea Containers' remaining business -- a rail concession in the UK, the GE SeaCo container leasing joint venture and certain other container assets -- in relation to the amount of debt obligations post sale of Silja Lines and other ferry assets. In Moody's view, Sea Containers may not be able to meet the March 31, 2006 due date to file its Form 10-K. Moody's also notes that the indentures governing Sea Container's senior notes include a covenant that obligates the company to file with the SEC all reports required by the Exchange Act of 1934. Consequently, the company may not be in compliance with the reporting requirements of the indentures should it fail to meet the March 31, 2006 deadline. Ratings placed under review: Sea Containers Ltd.: * Corporate Family Rating and senior secured of B2; and * Senior unsecured notes and Issuer Rating of B3. Moody's also assigned definitive ratings to the revolving credit facility and senior notes. Sea Containers Ltd., headquartered in Hamilton Bermuda, is a provider of ferry services, primarily in the Baltic Sea, the franchisee-operator of the Great Northern Railroad in the U.K., and a lessor of cargo containers to the shipping industry. SPIRITCORP INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Spiritcorp Inc. dba The Furniture Dude 14771 7th Street Victorville, California 92395 Bankruptcy Case No.: 06-10600 Type of Business: The Debtor manufactures and retails home furniture. See http://www.thefurnituredude.com/ Chapter 11 Petition Date: March 24, 2006 Court: Central District Of California (Riverside) Judge: David N. Naugle Debtor's Counsel: Lazaro Fernandez, Esq. 3403 Tenth Street, Suite 714 Riverside, California 92501 Tel: (951) 684-4474 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Broyhill Furniture Industries Trade Debt $153,868 P.O. Box 60194 Charlotte, NC 28260-0699 Stanton International Trade Debt $104,435 P.O. Box 3750 Tualatin, OR 97062 David Post Trade Debt $80,000 9024 Joshua Street Apple Valley, CA 92308 Diamond Mattress Company, Inc. Trade Debt $76,686 Woodmarc Enterprises LLC Trade Debt $67,797 The CIT Group Trade Debt $63,383 Commercial Services Ashley Furniture Trade Debt $51,574 Industries Inc. John Novak Trade Debt $50,000 Daily Press Victor Valley Trade Debt $49,040 Charter Media Trade Debt $48,903 Furniture Values International Trade Debt $45,735 CMA Business Credit Services Trade Debt $40,528 Sunny Designs, Inc. Trade Debt $29,526 Moradi Family Trust Trade Debt $34,362 American Express Trade Debt $32,574 Mike Cims Inc. Trade Debt $24,455 Schnadig Corp. Trade Debt $24,102 Best Chairs Inc. Trade Debt $22,954 Cochrane Furniture Trade Debt $16,613 Company Inc. BB&T Commercial Finance Trade Debt $16,338 STELCO INC: Seeks Court Order on Amended Floating Rate Notes ------------------------------------------------------------ Stelco Inc. proposed to amend its Court-approved restructuring plan to change, among other things, certain terms of the New Secured Floating Rate Notes to be issued under the plan. The amendments include an increase of 0.50% to the interest rate payable under the FRNs in the first two years of the term and thereafter under certain circumstances. The call protection for the FRNs has also been changed. The proposed amendments to the FRNs are the result of discussions held among key stakeholders to finalize the terms of various agreements contemplated by Stelco's restructuring plan. The proposed amendments require: * the consent of the Court-appointed Monitor, Tricap Management Limited and the other equity sponsors, and * must not be objected to by the Senior Bondholder Steering Committee. Stelco has obtained the consent of the Monitor and Tricap. The Company is awaiting confirmation from the other equity sponsors and the SBSC that Stelco may proceed with the proposed amendments. The Province of Ontario supports the amendments. Stelco will also seek an Order of the Superior Court of Justice (Ontario) in connection with U.S. securities law requirements and the issuance of the amended FRNs. The motion hearing is scheduled tomorrow, March 28, 2006. If for any reason the remaining confirmations from the other equity sponsors and the SBSC are not obtained, the motion will not proceed. On March 9, 2006, Stelco sought and obtained an Order in connection with U.S. securities law requirements and the issuance and exchange of the FRNs and guarantees of Stelco's obligations under the FRNs. The Company has been advised by U.S. securities law counsel that an Order similar to that obtained on March 9, 2006 is required in respect of the amended FRNs. The Order being sought, if granted, will enable Stelco to utilize a U.S. securities law exemption by approving the terms and conditions of the issuance and exchange of the amended FRNs and other securities for the claims of affected creditors, and by declaring that those terms and conditions are fair to the affected creditors, in a manner similar to the approval in the March 9, 2006 Order. Notice of this motion is being provided so that affected creditors and other persons are aware of the hearing and of the fact that the hearing is open to them to be heard. A full-text copy of the Notice of Motion is available at no charge at http://bankrupt.com/misc/1647.pdf About Stelco Stelco is expected to emerge from its Court-supervised restructuring on March 31, 2006. At that time, new common shares will be issued under the approved restructuring plan and are expected to begin trading on the TSX on April 3, 2006, subject to certain conditions. Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. The company is currently in the final stages of a Court-supervised restructuring. This process is designed to establish the Company as a viable and competitive producer for the long term. The new Stelco will be focused on its Ontario-based integrated steel business located in Hamilton and in Nanticoke. These operations produce high quality value-added hot rolled, cold rolled, coated sheet and bar products. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. The Court extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until March 31, 2006. STELCO INC: TSX Halts Trading on 9.5% Sub. Debentures due 2007 -------------------------------------------------------------- Stelco Inc. has been informed by Toronto Stock Exchange that at the opening on March 24, 2006, TSX halted trading on Stelco's 9.5% Convertible Subordinated Debentures due 2007 and delisted the Debentures at the close on March 24, 2006. The company's restructuring plan is expected to be completed on March 31, 2006. Accordingly, Stelco has set a record date of the close of business on March 28, 2006 for the distribution of: * New Common Shares, * New Warrants, * New Secured Floating Rate Notes and * cash to its affected creditors, including holders of the Debentures. Distributions to which the holders of Debentures may be entitled will be paid to the Monitor in trust in accordance with the Plan. TSX has conditionally approved the listing of the New Common Shares, New Warrants and FRNs. It is anticipated that trading of these securities will begin on TSX on or about April 3, 2006. About Stelco Stelco is expected to emerge from its Court-supervised restructuring on March 31, 2006. At that time, new common shares will be issued under the approved restructuring plan and are expected to begin trading on the TSX on April 3, 2006, subject to certain conditions. Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. The company is currently in the final stages of a Court-supervised restructuring. This process is designed to establish the Company as a viable and competitive producer for the long term. The new Stelco will be focused on its Ontario-based integrated steel business located in Hamilton and in Nanticoke. These operations produce high quality value-added hot rolled, cold rolled, coated sheet and bar products. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. The Court extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until March 31, 2006. STELCO INC: Ensures March 31 Plan Implementation Date ----------------------------------------------------- Stelco Inc. reported that the Monitor filed its Fifty-Fifth Report in the matter of the Company's Court-supervised restructuring. The Report deals exclusively with the steps that have been taken in recent weeks by Stelco, the Monitor and other relevant parties towards implementation of the restructuring plan under the Companies' Creditors Arrangement Act and the reorganization of Stelco's corporate structure under the Canada Business Corporations Act. The Monitor notes that the parties have been working diligently towards that objective. This activity has entailed the resolution of outstanding issues and the finalization of principal documents. The Report adds that Stelco, the Monitor and other relevant parties are of the view that a plan implementation date of March 31, 2006 is achievable. The Monitor concludes by expressing the view that the extension of the stay period to March 31, 2006 continues to be appropriate under the circumstances. Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. The company is currently in the final stages of a Court-supervised restructuring. This process is designed to establish the Company as a viable and competitive producer for the long term. The new Stelco will be focused on its Ontario-based integrated steel business located in Hamilton and in Nanticoke. These operations produce high quality value-added hot rolled, cold rolled, coated sheet and bar products. In early 2004, after a thorough financial and strategic review, Stelco concluded that it faced a serious viability issue. The Corporation incurred significant operating and cash losses in 2003 and believed that it would have exhausted available sources of liquidity before the end of 2004 if it did not obtain legal protection and other benefits provided by a Court-supervised restructuring process. Accordingly, on Jan. 29, 2004, Stelco and certain related entities filed for protection under the Companies' Creditors Arrangement Act. The Court extended the stay period under Stelco's Court-supervised restructuring from Dec. 12, 2005, until March 31, 2006. SUPERB SOUND: Court OKs $757K Tri-Phase Sale to Audio Automation ---------------------------------------------------------------- The Hon. Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis authorized Superb Sound, Inc., to sell substantially all of the assets of its wholly owned division, Tri-Phase Acquisition, LLC, to Robert Haecker and Audio Automation. The Debtors determined at an auction on March 1, 2206, that Mr. Haecker's $757,126 bid was the highest and best offer for the Tri-Phase assets. Patriot Investments, LLC, which tendered the next best offer, was named as the Backup Bidder. If Haecker fails to close the proposed sale in accordance with the terms of the Asset Purchase Agreement, Patriot will have the opportunity to close a sale in the amount of its Backup Bid. Pursuant to the court-approved bid procedures, Patriot is entitled to a $20,000 breakup fee if the Debtor closes the sale to Mr. Haecker. Headquartered in Indianapolis, Indiana, Superb Sound, Inc., dba Ovation, Ovation Audio/Video and Ovation Home -- http://www.ovation-av.com/-- is an audio, video and mobile electronics specialist. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. S.D. Ind. Case No. 05-29137). William J. Tucker, Esq., at William J. Tucker & Associates, LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,416,642 in assets and $14,546,796 in debts. SUPERIOR ESSEX: S&P Holds Low-B Ratings & Revises Outlook to Pos. ----------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Atlanta, Georgia-based Superior Essex Inc. to positive from stable, and affirmed its: * 'B+' corporate credit rating; * 'BB' secured bank loan rating; and * 'B' senior unsecured debt rating. "The revised outlook reflects improved financial leverage stemming from improved profitability," said Standard & Poor's credit analyst Stephanie Crane. As a result, Superior Essex's financial leverage metrics, as measured on an adjusted total debt to EBITDA basis, were 3.8x, as of December 2005, compared with 4.7X at December 2004. Superior Essex is a leading global supplier of magnet wire and copper wire to the communications and industrial and power industry. The ratings on Superior Essex reflect a cyclical operating profile driven by fluctuating market demand and volatility in raw material pricing and reduced, but still high, leverage. These factors are somewhat offset by the company's leading position in a global market for wire and cables, especially magnet wire. Superior Essex participates in two segments of the cable and wire industry. It has a leading share of the North American market for copper wire and cable and, to a lesser extent, fiber optic cables supplied to telecommunications carriers for use in their local loops. Superior Essex also is a major supplier and distributor of magnet wire and related insulation and fabrication products used in a range of industrial applications, including: * motors, * transformers, and * generators. The joint venture with Nexans to produce magnet wire in Europe makes Superior Essex the world's largest supplier. Both markets have experienced significant volatility in recent years, but recently have shown mixed signs of recovery. T.A.T PROPERTY: Has Until March 30 to File a Chapter 11 Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York extended, until Mar. 30, 2006, the period within which T.A.T. Property has the exclusive right to file a chapter 11 plan. The Court also extended, until May 29, 2006, the period within which the Debtor has the exclusive right to solicit acceptances of that plan. The Debtor reminds the Court that its chapter 11 case was filed after its efforts to negotiate a standstill agreement with LaSalle National Bank failed, and foreclosure of the its building was imminent. LaSalle holds the mortgage on the Debtor's only substantial asset, which is an office building located at 45 Executive Drive in Plainview, New York. The Debtor tells the Court that it is in the final stages of obtaining funding to cure its prepetition defaults under the mortgage note. The Debtor further says that it has tiny prepetition debts other than its debt to LaSalle and its subordinated debt to Michael Zenobio, the Debtor's principal beneficiary and grantor. The Debtor believes that whether it seeks a structured dismissal or files a chapter 11 plan to be paid from cash flow, the Debtor will pay 100 cents on the dollar to creditors on undisputed claims over time. Debtor says that its assets will not be substantially depleted during the requested extension. The Debtor contends that an extension of its exclusive periods will enable it to preserve its ability to formulate and negotiate a consensual plan. Headquartered in New York, New York, T.A.T. Property filed for chapter 11 protection on Oct. 14, 2005 (Bankr. S.D.N.Y. Case No. 05-47223). Barton Nachamie, Esq., at Todtman, Nachamie, Spizz & Johns, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $13,531,595 in assets and $13,522,435 in debts. TCR I: U.S. Trustee Wants Case Converted to Chapter 7 ----------------------------------------------------- W. Clarkson McDow, Jr., Esq., the U.S. Trustee for Region 4, asks the U.S. Bankruptcy Court for the Eastern District of Virginia to convert TCR I, Inc.'s chapter 11 case to a chapter 7 liquidation proceeding. Mr. McDow tells the Court that the Debtor has failed to file its monthly operating reports and thus prevents him and other parties from monitoring the Debtor's financial condition. Mr. McDow contends that the Debtor's failure to file a plan of reorganization and disclosure statement, as well as other factors relating to the operation of the Debtor's business, shows inability to effectuate a plan. TCR I, Inc., filed for chapter 11 protection on September 8, 2005 (Bankr. E.D. Va. Case No. 05-13450). Bruce W. Henry, Esq., at Henry, O'Donnell, Dahnke & Walther, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $6,980,559 in assets and $37,059,268 in debts. TECH DATA: Fitch Affirms BB+ Ratings & Changes Outlook to Stable ---------------------------------------------------------------- Fitch Ratings revised Tech Data Corp.'s (TECD) Rating Outlook to Stable from Positive and affirmed the company's 'BB+' issuer default rating and 'BB+' senior unsecured bank credit facility. The 'BB' subordinated debt rating is withdrawn, following TECD's repurchase of the $290 million convertible subordinated debentures in December 2005. Fitch's action affects approximately $250 million of total debt. The Stable Rating Outlook reflects Fitch's expectations that TECD's weaker-than-expected operating performance over the past several quarters, driven primarily by operating challenges in Europe, will continue through the near term despite anticipated costs savings from the company's current restructuring activities. While Fitch believes TECD will regain some market share believed to have been lost over the last few quarters to its main competitor in Europe, Ingram Micro (rated 'BBB-' with a Stable Outlook by Fitch), European information technology demand will likely remain soft, and a competitive but rational environment will continue to pressure Tech Data's gross margins in calendar 2006. TECD's current restructuring and ongoing systems harmonization initiatives drove operating expenses lower and partially mitigated gross margin erosion during the recent fiscal year ended Jan. 31, 2006 (fiscal 2006). However, operating EBIT margins declined slightly to approximately 1.1% for fiscal 2006 from 1.2% in fiscal 2005. Despite operational challenges in Europe, TECD continued its comparatively strong operating performance in the Americas region, as sales in this region grew 11.3% for fiscal 2006 to $9.4 billion and operating EBIT margins remained at 1.6%. The ratings continue to reflect: * the comparatively thin operating EBIT margins associated with the wholesale IT distribution industry, which Fitch believes will be challenged to increase above 1.5% over the longer term; * the more mature growth characteristics of TECD's major geographic markets; * the company's lack of presence in the faster growing Asia-Pacific (APAC) market and the significant investments that Fitch believes would be required to establish a foothold in this region; and * vendor concentration to Hewlett-Packard Company (HP; rated 'A' with a Positive Rating Outlook). The ratings are supported by: -- TECD's significant customer diversification, with no customer representing more than 5% of net sales; -- leading wholesale IT distributors' market positions and ability to provide small- to medium-size (SMB) businesses with working capital financing and inventory management (as well as other value-added) services; -- positive and relatively consistent long-term growth prospects for the SMB market; -- the industry's ability to generate free cash flow in a downturn, as well as at growth rates of up to 5%; and -- the company's conservative capital structure with no long- term debt. HP has been consolidating the number of distributors of HP products in order to improve efficiency and provide better incentives to those distributors that are committed to selling complete HP solutions that have higher margins than standalone hardware products. Fitch believes this may benefit TECD in the long term if the consolidation results in a greater percentage of HP's indirect sales being distributed through TECD. A potential risk is if HP aggressively pursues a direct model, especially for personal computers, since TECD is a significant distributor of HP products. Fitch believes the threat of disintermediation from HP is fairly low in the intermediate term. TECD's total adjusted debt to EBITDAR increased to approximately 3.1x from 2.3x in the prior year due primarily to lower profitability and higher total debt balances associated with greater outstanding balances of uncollected trade receivables sold using the company's accounts receivable (A/R) facilities that alternatively would have been funded with short-term debt. In addition, EBITDA-to-interest expense fell to less than 9x in fiscal 2006 from in excess of 10x in the prior two fiscal years. Although credit protection measures are unlikely to meaningfully improve in the intermediate term, they remain consistent with the current rating category. After adjusting for the change in proceeds received from A/R sales, TECD used approximately $91 million of cash on a free cash flow basis in fiscal 2006, despite sales growth of only 3.7%. However, Fitch believes annual free cash flow will be positive ($50 million-$150 million) for fiscal 2007, driven primarily by the modest organic growth prospects associated with TECD's largest geographies, the U.S. and Europe. Historically, the wholesale IT distributors have demonstrated the ability to generate cash from operations at sales growth rates of up to 5%. Based on Fitch's estimates, TECD's cash conversion cycle (CCC) days increased slightly to 35 days in Fiscal 2006 from 34 in fiscal 2005 and remains well above Ingram Micro's CCC of 20 days. Fitch expects TECD will likely complete its outstanding common stock repurchase program over the next couple of quarters. Through fiscal 2006, TECD purchased approximately $120 million of the total $200 million authorized by its board of directors in November 2005. While TECD can support this share repurchase program, Fitch believes meaningful additional share repurchase activity could result in negative ratings actions. TECD's liquidity position remains sufficient to fund operations (primarily working capital) and, as of Jan. 31, 2006, was supported by cash and cash equivalents of: * approximately $157 million; * $250 million multi-currency revolving bank credit facility expiring March 2010; * $400 million U.S. receivables securitization facility expiring August 2006; and * various other lines of credit and overdraft facilities. Further liquidity is provided by a $200 million trade receivables purchase facility expiring May 2006 and an uncommitted $146 million trade receivables purchase facility. An aggregate of approximately $288 million of A/Rs were sold and uncollected under these combined trade receivable purchase facilities. As of Jan. 31, 2006, TECD was able to borrow an aggregate of approximately $954 million under these facilities, after giving effect to financial covenants. Total debt including A/Rs sold but uncollected as of Jan. 31, 2006 was approximately $539 million and consisted of: * $288 million of sold but uncollected A/Rs; * $235 million of revolving credit loans outstanding; and * approximately $16 million of capital lease obligations. On-balance-sheet debt declined to $251 million at Jan. 31, 2006 from approximately $377 million a year ago, due to debt repayment, funded with both available cash and off-balance-sheet financing. As a result, adjusted debt, which includes A/Rs sold but uncollected and capitalized rental expense, increased to approximately $1.1 billion at year-end fiscal 2006 from approximately $893 million a year ago. TIME WARNER: Moody's Junks Proposed $200 Mil. Senior Notes Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to the proposed $200 million convertible senior notes at Time Warner Telecom Inc. The net proceeds of the offering will be used to redeem a portion of the $400MM 10-1/8% senior notes at TWT. The rating reflects the transaction's modest improvement to the company's credit profile, as the new notes will have a lower coupon rate, and will extend TWT's average maturities. Moody's affirmed the B2 corporate family rating, the SGL-1 rating, as well as the existing debt ratings at TWT and its wholly owned subsidiary Time Warner Telecom Holdings, Inc. The outlook remains stable. Rating actions: Time Warner Telecom, Inc.: * $200 million convertible senior notes due 2026 -- Assigned Caa1 * $400 Million 10.125% Sr. Notes due 2011 -- Affirmed Caa1 * Corporate family rating -- Affirmed B2 * Speculative grade liquidity rating -- Affirmed SGL-1 Time Warner Telecom Holdings Inc.: * $110 Million Sr. Secured Revolver due 2009 -- Affirmed B1 * $200 Million Sr. Secured Term Loan B due 2010 -- Affirmed B1 * $240 Million Second Priority Senior Secured Floating Rate Notes due 2011 -- Affirmed B2 * $400 Million 9.25% Senior Notes due 2014 -- Affirmed B3 The rating outlook remains stable Time Warner Telecom Inc., headquartered in Littleton, Colorado, provides data, dedicated Internet access, and local and long distance voice services to business customers in 44 metropolitan markets in the United States. TRIMARAN CLO: Moody's Puts Ba2 Rating on $11 Mil. Class E Notes --------------------------------------------------------------- Moody's Investors Service assigned these ratings to notes issued by Trimaran CLO V Ltd.: * Aaa to the $182,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2018 and the $21,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2018; * Aa2 to the $33,000,000 Class B Second Priority Floating Rate Notes Due 2018; * A2 to the $17,000,000 Class C Third Priority Deferrable Floating Rate Notes Due 2018; * Baa2 to the $12,000,000 Class D Fourth Priority Deferrable Floating Rate Notes Due 2018; and * Ba2 to the $11,000,000 Class E Fifth Priority Deferrable Floating Rate Notes Due 2018. The collateral manager is Trimaran Advisors, L.L.C. Moody's noted that its ratings of notes issued by this cash flow CDO reflect the credit quality of the collateral pool, the credit enhancement for the notes inherent in the capital structure and the transaction's legal structure. TRIMEDIA ENT: January 31 Balance Sheet Upside-Down by $7.42 Mil. ---------------------------------------------------------------- TriMedia Entertainment Group, Inc., reported its financial results for the quarter ended Jan. 31, 2006, to the Securities and Exchange Commission on March 17, 2006. For the three months ended Jan. 31, 2006, TriMedia incurred a $758,557 net loss on $39,944 of total revenues. For the three months ended Jan. 31, 2005, the Company incurred a $2,674,750 net loss on $2,262 of total revenues, and reported $475,368 of negative cash flow from operations. At Jan. 31, 2006, TriMedia's balance sheet shows a $3,828,965 negative working capital balance. At Jan. 31, 2006, TriMedia's balance sheet showed $731,061 in total assets and $8,157,799 in total liabilities. The Company's balance sheet shows a $20,667,821 accumulated deficit at Jan. 31, 2006. Going Concern Doubt Cogen Sklar, LLP expressed substantial doubt about TriMedia's ability to continue as a going concern after auditing the Company's financial statements for the years ended October 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations, negative working capital and negative cash flows. TriMedia says that it may incur further operating losses and experience negative cash flow in the future. Achieving profitability and positive cash flow depends on its ability to generate sufficient revenues from its films and recording studio and its ability to raise additional capital. "But there can be no assurances that the Company will be able to generate sufficient revenues or raise additional capital to achieve and sustain profitability and positive cash flow in the future," management says in its latest quarterly report. A full-text copy of TriMedia's latest quarterly report is available for free at http://ResearchArchives.com/t/s?6ed New CFO On June 14, 2005, the Company's Board of Directors terminated the employment of Shawn Taylor as chief financial officer and Daniel Taylor as president. The Board appointed Christopher Schwartz to the position of chief financial officer and president following the termination. About TriMedia Founded in 2002, TriMedia Entertainment Group, Inc., -- http://www.trimediaent.com/-- is an international multimedia entertainment company with a focus on developing entertainment content. The company primarily produces films and recorded music on the DVD and CD formats. The Company produces and distributes music and filmed entertainment content through holdings such as Ruffnation Music, Metropolitan Recording, Ruffnation Films, and Snipes Production. The company has a strategic partnership with Sony, giving Ruffnation Films access to Sony BMG artists, which the company plans to feature in its low-budget films and their related soundtracks. CEO Christopher Schwartz owns 46% of TriMedia. At Jan. 31, 2006, TriMedia Entertainment's stockholders' equity deficit widened to $7,426,738, from a $6,788,180 deficit reported at Oct. 31, 2005. VALEANT PHARMA: VISER1 Trial Results Cue Moody's to Hold Ratings ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Valeant Pharmaceuticals International including the B1 Corporate Family Rating and B1 senior notes due 2011. At the same time, Moody's revised Valeant's rating outlook to negative from stable. The rating actions follow the recent announcement of mixed results from the VISER1 Phase III trial of Viramidine, Valeant's experimental hepatitis C treatment. According to the VISER1 data, Viramidine met the clinical endpoint for safety. However, the VISER1 data showed that Viramidine failed to meet the efficacy endpoint on an overall intent-to-treat basis. The company is awaiting the results of the ongoing VISER2 Phase III study, which Moody's expects to be reported during the second half of 2006. The affirmation of Valeant's B1 rating reflects several key rating factors outlined in Moody's Global Pharmaceutical Rating Methodology. Valeant reported $235 million of cash and short term investments as of Dec. 31, 2005, and its cash coverage of debt maps to the "Ba" category. Valeant's cash cushion helps to offset relative weak ratios of cash flow from operations to debt and free cash flow to debt, which would be more indicative of a company rated B2 or lower. The rating outlook revision to negative from stable reflects Moody's belief that development risk associated with Viramidine has increased following the mixed VISER1 results. If the anticipated filing of Viramidine is delayed, then the rating could be downgraded. Under such a scenario, the potential risk is prolonged weakness in free cash flow and cash flow relative to debt. The ratings could also be downgraded if cash flow relative to debt erodes for reasons unrelated to Viramidine. Scenarios that could potentially cause a downgrade include: (1) an unforeseen decline in key products such as Efudex, Bedoyecta, or Diastat; or (2) cash-financed acquisitions without near-term cash flow benefits. To consider a ratings upgrade, Moody's would also expect CFO/Debt sustained in excess of 15% and FCF/Debt in excess of 10%, i.e. the high ends of the "B" category outlined in our methodology. Moody's believes that successful approval and launch of Viramidine would be necessary for Valeant to achieve these ratios. Ratings affirmed: * B1 Corporate Family Rating * B1 7% senior notes of $300 million due 2011 Moody's does not rate Valeant's 3% convertible subordinated notes of $240 million due 2010 or its $4% convertible subordinated notes of $240 million due 2013. Headquartered in Costa Mesa, California, Valeant Pharmaceuticals International is a global specialty pharmaceutical company with $823 million of 2005 revenues. VIASYSTEMS INC: S&P Affirms B Rating & Revises Outlook to Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on St. Louis, Missouri-based Viasystems Inc. and revised the ratings outlook to positive from stable, following the company's announcement that it will sell the Wire Harness Division for about $320 million and apply much of the proceeds to prepay its term loan. "The ratings continue to reflect a highly fragmented and competitive printed circuit board (PCB) manufacturing market, the company's volatile sales and profitability levels through the business cycle, and high debt leverage," said Standard & Poor's credit analyst Lucy Patricola. These partly are offset by the company's transition to low-cost manufacturing locations and its leading original equipment manufacturer (OEM) customer base. Viasystems manufactures PCBs for electronics OEMs. The company's wire harness division, which serves consumer appliance suppliers with sales of $374 million for the nine months through Sept. 30, 2005, is viewed as noncore and will allow the company to focus on its PCB manufacturing operations. While the business unit generated about one-half of the company's EBITDA as of Sept. 30, 2005 (adjusting for non-recurring losses), leverage will be reduced following the debt repayment to about 4x. Pro forma for the separation of the wire harness business, PCB manufacturing represents about 90% of Viasystems' sales. PCB demand faces considerable volatility through the business cycle and, when combined with high fixed PCB manufacturing costs, can lead to wide profitability swings. The company, along with the industry, is migrating capacity to low-cost sites to minimize costs. Although Viasystems sells complex PCBs that can command somewhat higher margins in the marketplace, the: * commodity-like nature of the market; * ongoing industry overcapacity; and * intense competition likely will result in only modest price improvements over the intermediate term. VILLAGES AT SARATOGA: Files Plan & Disclosure Statement in Utah --------------------------------------------------------------- The Villages at Saratoga Springs, LC, delivered a Disclosure Statement explaining its Chapter 11 Plan of Liquidation to the U.S. Bankruptcy Court for the District of Utah on March 22, 2006. Overview of the Plan The Plan contemplates the liquidation of the Debtor's assets and distribution of the cash proceeds to its creditors and interest holders. The Debtor's principal assets are $8.2 million in cash. The Debtor expects that the available cash will be further reduced by payment of additional administrative expenses and professional compensation on an ongoing basis as services are rendered. The available cash was received from the sale of the Debtor's assets to Deer Canyon Saratoga, LLC. The Debtor says that its remaining assets are a contingent payment of up to $2 million from the sale of the property and some small prepetition receivables subject to offset by creditors. Treatment of Claims Under the Plan, all Allowed General Unsecured claims are impaired and will be paid in full with interest, after the payment, in full, of all then Allowed Administrative Expense Claims. Holders of Class A claims will first be paid up to the allowed amounts of their claims, and then, to the extent there are sufficient funds to do so, will receive interest on the allowed amounts of their claims from the Petition Date until the allowed amount and all interest are paid in full. Undisputed Allowed Claims will be paid in full on the Effective Date. Disputed Claims will be paid in full upon entry of Court's final order allowing the claim in fixed amount. Holders of Equity Interest will receive no distribution and will be paid their pro rata portions of the Debtors' profits after all Allowed Class A Claims have been paid in full. Holders of Class B interest are impaired. The Court has scheduled a hearing on Apr. 4, 2006, 10:30 a.m., to consider the adequacy of the Debtor's Disclosure Statement Headquartered in Spanish Fork, Utah, The Villages at Saratoga Springs, LC, filed for chapter 11 protection on Aug. 29, 2005 (Bankr. D. Utah Case No. 05-33380). Robert Fugal, Esq., at Bird & Fugal, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $26,002,293 in assets and $15,188,610 in debts. VITRO S.A.: S&P Downgrades Corporate Credit Rating to B- from B --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term local and foreign currency corporate credit ratings assigned to glass manufacturer Vitro S.A. de C.V. and its glass containers subsidiary Vitro Envases Norteamerica S.A. de C.V. (Vena) to 'B-' from 'B'. Standard & Poor's also lowered the long-term national scale corporate credit rating assigned to Vitro to 'mxBB+' from 'mxBBB-'. The outlook is negative. Standard & Poor's also lowered the rating assigned to Vitro's notes due 2013 and Servicios y Operaciones Financieras Vitro S.A. de C.V. notes due 2007 (which are guaranteed by Vitro) to 'CCC' from 'CCC+'. Standard & Poor's also lowered the rating assigned to Vena's notes due 2011 to 'B-' from 'B'. "The rating action reflects our increased concerns regarding the group's liquidity," said Standard & Poor's credit analyst Jose Coballasi. "Although we acknowledge the group's refinancing efforts and ongoing initiatives to reduce the debt of the holding company, the continued weakness in the group's operating cash flow generation has increased the importance of asset sales as a source of free operating cash flow to meet upcoming debt maturities, which total about $650 million over the next two years." The ratings on Vitro reflect the company's high financial leverage and tight liquidity and the challenging business environment it faces. The ratings also reflect the company's leading position in glass containers and important share in flat glass in Mexico and its export activities and international operations (particularly in the U.S.), which contribute about 50% of total revenues. The ratings on Vena remain equalized with those of its parent company, reflecting the latter's ability and incentive to burden the company with liabilities thanks to its 100% equity interest in Vena. Monterrey, Mexico-based Vitro, through its subsidiary companies, is Mexico's leading glass producer. Vitro is a major participant in three principal businesses: * flat glass, * glass containers, and * glassware. Vitro also produces raw materials and equipment and capital goods for industrial use. The negative outlook reflects Standard & Poor's concerns regarding Vitro's reliance on its asset sales and refinancing efforts to meet upcoming debt maturities. Further weakness in the group's liquidity and financial performance would lead to a negative rating action. Actions that effectively reduce the group's debt burden and/or a significant improvement in its operating and financial performance could lead to a positive rating action. * Alvarez & Marsal Hires James Decker as Managing Director ---------------------------------------------------------- Global professional services firm Alvarez & Marsal signaled its intent to expand the firm's corporate finance capabilities with the addition of veteran investment banker James D. Decker and his long-standing team of seasoned professionals. Mr. Decker and his team are based in the firm's Atlanta office and join A&M's Corporate Finance professionals located in New York and Phoenix. Mr. Decker joins A&M as a managing director to help build the firm's footprint and capabilities in M&A, financings and corporate restructurings, for which the firm has been responding to increased demand in recent years. For the past seven years, Mr. Decker was a managing director at the investment-banking firm of Houlihan Lokey Howard & Zukin. As co-head of Houlihan Lokey's Atlanta-based Southeast region, he served clients throughout the country on a broad range of transactions involving mergers, acquisitions, corporate restructurings and financings. "Alvarez & Marsal provides sophisticated financial advisory services to middle market and large cap clients involved in complex situations," George Varughese, a managing director of A&M's Corporate Finance Group who is based in New York, said. "With the addition of Jim and his team of talented professionals, all of whom bring great track records in investment banking, we are making a strong statement about our ability to serve private and public companies on a broader scale. Jim and I will work together with our team to aggressively grow our practice and make our capabilities in M&A, corporate restructurings and financings an even more integral part of the suite of services A&M delivers to its clients." "I am delighted to join Alvarez & Marsal, and look forward to working with George Varughese to build a world-class corporate finance function on the firm's privately held, owner-operated platform," said Mr. Decker. "Because of its operational heritage, A&M is one of the few firms today that is ideally positioned to deliver an integrated financial advisory services offering, one that blends transactional expertise with operating resources to help clients improve profitability and increase value. George and I believe this is an innovative approach to corporate finance, and one that will be very compelling in the market. Whether working in a distressed environment or assisting healthier companies with an array of strategic transactions, we are committed to bringing top tier expertise on board to lead deals, raise capital and evaluate restructuring alternatives." Mr. Decker brings more than more than 17 years of investment banking experience with a primary focus on middle market M&A, financing and restructuring advisory services. He has initiated and completed a variety of transactions including restructurings, reorganizations, exclusive sale assignments, acquisitions, divestitures, debt and equity financings, management buyouts, leveraged buyouts, recapitalizations, valuations, and fairness opinions. During his career, he has completed in excess of 150 transactions across a variety of industries. He holds an MBA from The Wharton School and a bachelor's degree from Vanderbilt University. Also joining from Houlihan Lokey are: * Kevin Vermillion, senior director; * Jay Jacquin, director; * Porter Jones, associate; and * Angela Ulrich, analyst. In addition, Vineet Batra and Eli Braun recently joined as a director and analyst in the New York-based Corporate Finance Group working with George Varughese and Tim Hughes, a director, as well as Marc Liebman, a managing director based in Phoenix. As a registered NASD broker-dealer, Alvarez & Marsal's Corporate Finance group represents both buyers and sellers in M&A transactions, financings and restructurings, primarily involving middle market companies. Providing a one-stop solution, the firm's services include due diligence, valuation, negotiation, documentation, fairness opinions, and, ultimately, execution. Having a thorough understanding of the broad market complexities, regulatory intricacies and subtle nuances that can make or break a deal, A&M guides clients through the process from conception to closing. About Alvarez & Marsal Alvarez & Marsal -- http://www.alvarezandmarsal.com/-- is a leading global professional services firm with expertise in guiding underperforming companies and public sector entities through complex financial, operational and organizational challenges. The firm employs a distinctive hands-on approach by working closely with clients, management and stakeholders to resolve problems and implement solutions. Founded in 1983, Alvarez & Marsal draws on its strong operational heritage to provide specialized services, including: Turnaround Advisory, Crisis and Interim Management, Performance Improvement, Creditor Advisory, Global Corporate Finance, Dispute Analysis and Forensics, Tax Advisory, Business Consulting, Real Estate Advisory and Transaction Advisory. A network of experienced professionals in the US, Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation. * BOND PRICING: For the week of Mar. 20 - Mar. 24, 2006 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 0 ABC Rail Product 10.500% 12/31/04 0 Acme Metals Inc 10.875% 12/15/07 0 Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 2 Adelphia Comm. 7.500% 01/15/04 61 Adelphia Comm. 7.750% 01/15/09 65 Adelphia Comm. 7.875% 05/01/09 63 Adelphia Comm. 8.125% 07/15/03 63 Adelphia Comm. 8.375% 02/01/08 64 Adelphia Comm. 9.250% 10/01/02 64 Adelphia Comm. 9.375% 11/15/09 67 Adelphia Comm. 9.500% 02/15/04 64 Adelphia Comm. 9.875% 03/01/05 60 Adelphia Comm. 9.875% 03/01/07 63 Adelphia Comm. 10.250% 06/15/11 67 Adelphia Comm. 10.250% 11/01/06 62 Adelphia Comm. 10.500% 07/15/04 66 Adelphia Comm. 10.875% 10/01/10 61 AHI-Dflt07/05 8.625% 10/01/07 71 Allegiance Tel. 11.750% 02/15/08 30 Allegiance Tel. 12.875% 05/15/08 13 Amer & Forgn Pwr 5.000% 03/01/30 72 Amer Color Graph 10.000% 06/15/10 71 American Airline 9.980% 01/02/13 72 American Airline 9.980% 01/02/13 72 American Airline 9.980% 01/02/13 72 Ames Dept Stores 10.000% 04/15/06 0 AMR Corp. 10.290% 03/08/21 73 Anvil Knitwear 10.875% 03/15/07 50 AP Holdings Inc 11.250% 03/15/08 15 Archibald Candy 10.000% 11/01/07 7 Armstrong World 6.350% 08/15/03 70 Armstrong World 6.500% 08/15/05 72 Armstrong World 7.450% 05/15/29 72 Armstrong World 9.000% 04/17/01 62 Arvin Capital I 9.500% 02/01/27 70 Asarco Inc. 7.875% 04/15/13 65 Asarco Inc. 8.500% 05/01/25 72 At Home Corp. 4.750% 12/15/06 1 ATA Holdings 13.000% 02/01/09 1 Atlantic Coast 6.000% 02/15/34 17 Atlas Air Inc 8.010% 01/02/10 61 Autocam Corp. 10.875% 06/15/14 67 Avado Brands Inc 11.750% 06/15/09 1 Aviation Sales 8.125% 02/15/08 50 Avondale Mills 10.250% 07/01/13 72 Banctec Inc 7.500% 06/01/08 71 Bank New England 8.750% 04/01/99 7 Bank New England 9.500% 02/15/96 5 BBN Corp 6.000% 04/01/12 0 Big V Supermkts 11.000% 02/15/04 0 Budget Group Inc. 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 58 CCH II/CCH II CP 10.250% 01/15/10 56 Cell Therapeutic 5.750% 06/15/08 48 Cell Therapeutic 5.750% 06/15/08 62 Charter Comm Hld 8.625% 04/01/09 66 Charter Comm Hld 9.625% 11/15/09 66 Charter Comm Hld 10.000% 04/01/09 66 Charter Comm Hld 10.000% 05/15/11 51 Charter Comm Hld 10.750% 10/01/09 67 Charter Comm Hld 11.125% 01/15/11 53 Charter Comm Inc 5.875% 11/16/09 69 Cherokee Int'l 5.250% 11/01/08 70 Chic East Ill RR 5.000% 01/01/54 50 CIH 9.920% 04/01/14 52 CIH 10.000% 05/15/14 51 CIH 10.000% 05/15/14 53 CIH 11.125% 01/15/14 54 Ciphergen 4.500% 09/01/08 72 Clark Material 10.750% 11/15/06 0 CMI Industries 9.500% 10/01/03 0 Collins & Aikman 10.750% 12/31/11 33 Comcast Corp. 2.000% 10/15/29 41 Compudyne Corp 6.250% 01/15/11 75 Coyne Intl Enter 11.250% 06/01/08 72 CPNL-Dflt12/05 4.750% 11/15/23 31 CPNL-Dflt12/05 6.000% 09/30/14 25 CPNL-Dflt12/05 7.625% 04/15/06 52 CPNL-Dflt12/05 7.750% 04/15/09 58 CPNL-Dflt12/05 7.750% 06/01/15 26 CPNL-Dflt12/05 7.875% 04/01/08 54 CPNL-Dflt12/05 8.500% 02/15/11 37 CPNL-Dflt12/05 8.625% 08/15/10 39 CPNL-Dflt12/05 8.750% 07/15/07 59 CPNL-Dflt12/05 10.500% 05/15/06 57 Cray Inc. 3.000% 12/01/24 73 Cray Research 6.125% 02/01/11 35 Curagen Corp. 4.000% 02/15/11 75 Curative Health 10.750% 05/01/11 61 Dal-Dflt09/05 9.000% 05/15/16 28 Decorative Home 13.000% 06/30/02 0 Decrane Aircraft 12.000% 09/30/08 73 Delco Remy Intl 9.375% 04/15/12 46 Delco Remy Intl 11.000% 05/01/09 51 Delphi Corp 6.500% 08/15/13 65 Delphi Trust II 6.197% 11/15/33 42 Delta Air Lines 2.875% 02/18/24 26 Delta Air Lines 7.541% 10/11/11 69 Delta Air Lines 7.700% 12/15/05 26 Delta Air Lines 7.900% 12/15/09 27 Delta Air Lines 8.000% 06/03/23 26 Delta Air Lines 8.187% 10/11/17 69 Delta Air Lines 8.270% 09/23/07 70 Delta Air Lines 8.300% 12/15/29 28 Delta Air Lines 8.540% 01/02/07 33 Delta Air Lines 8.540% 01/02/07 43 Delta Air Lines 8.540% 01/02/07 61 Delta Air Lines 8.540% 01/02/07 71 Delta Air Lines 8.950% 01/12/12 70 Delta Air Lines 9.200% 09/23/14 70 Delta Air Lines 9.250% 03/15/22 27 Delta Air Lines 9.320% 01/02/09 56 Delta Air Lines 9.375% 09/11/07 72 Delta Air Lines 9.750% 05/15/21 27 Delta Air Lines 9.875% 04/30/08 64 Delta Air Lines 10.000% 05/17/10 71 Delta Air Lines 10.000% 06/01/10 63 Delta Air Lines 10.000% 06/01/11 46 Delta Air Lines 10.000% 06/05/11 59 Delta Air Lines 10.000% 06/05/13 59 Delta Air Lines 10.000% 08/15/08 28 Delta Air Lines 10.000% 12/05/14 46 Delta Air Lines 10.060% 01/02/16 66 Delta Air Lines 10.125% 01/02/10 39 Delta Air Lines 10.125% 05/15/10 28 Delta Air Lines 10.125% 06/16/09 61 Delta Air Lines 10.125% 06/16/10 60 Delta Air Lines 10.375% 02/01/11 24 Delta Air Lines 10.375% 12/15/22 27 Delta Air Lines 10.500% 04/30/16 75 Discovery Zone 13.500% 08/01/02 0 Diva Systems 12.625% 03/01/08 1 Duane Reade Inc 9.750% 08/01/11 74 Dura Operating 9.000% 05/01/09 49 Dura Operating 9.000% 05/01/09 51 Dyersburg Corp 9.750% 09/01/07 0 Eagle Food Centre 11.000% 04/15/05 1 Eagle-Picher Inc 9.750% 09/01/13 70 Encompass Service 10.500% 05/01/09 0 Enrnq-Dflt05/05 7.375% 05/15/19 39 Epix Medical Inc. 3.000% 06/15/24 65 Exodus Comm. Inc. 11.250% 07/01/08 0 Exodus Comm. Inc. 11.625% 07/15/10 0 Fedders North AM 9.875% 03/01/14 62 Federal-Mogul Co. 7.375% 01/15/06 42 Federal-Mogul Co. 7.500% 01/15/09 41 Federal-Mogul Co. 8.160% 03/06/03 30 Federal-Mogul Co. 8.250% 03/03/05 38 Federal-Mogul Co. 8.330% 11/15/01 37 Federal-Mogul Co. 8.370% 11/15/01 35 Federal-Mogul Co. 8.370% 11/15/01 38 Federal-Mogul Co. 8.800% 04/15/07 40 Finova Group 7.500% 11/15/09 33 FMXIQ-DFLT09/05 13.500% 08/15/05 41 Foamex L.P.-DFLT 9.875% 06/15/07 40 Ford Motor Co 6.500% 08/01/18 67 Ford Motor Co 6.625% 02/15/28 66 Ford Motor Co 7.125% 11/15/25 68 Ford Motor Co 7.400% 11/01/46 67 Ford Motor Co 7.500% 08/01/26 70 Ford Motor Co 7.700% 05/15/97 70 Ford Motor Co 7.750% 06/15/43 69 Ford Motor Cred 5.650% 01/21/14 72 Ford Motor Cred 5.750% 01/21/14 72 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.900% 02/20/14 73 Ford Motor Cred 6.000% 01/20/12 75 Ford Motor Cred 6.000% 01/20/15 73 Ford Motor Cred 6.000% 02/20/15 73 Ford Motor Cred 6.000% 03/20/14 72 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 75 Ford Motor Cred 6.000% 03/20/14 75 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.000% 11/20/14 74 Ford Motor Cred 6.050% 02/20/15 73 Ford Motor Cred 6.050% 03/20/14 74 Ford Motor Cred 6.050% 04/21/14 73 Ford Motor Cred 6.050% 12/22/14 73 Ford Motor Cred 6.050% 12/22/14 74 Ford Motor Cred 6.050% 12/22/14 74 Ford Motor Cred 6.100% 02/20/15 74 Ford Motor Cred 6.150% 01/20/15 74 Ford Motor Cred 6.150% 12/22/14 74 Ford Motor Cred 6.200% 03/20/15 74 Ford Motor Cred 6.250% 01/20/15 74 Ford Motor Cred 6.250% 03/20/15 74 Ford Motor Cred 6.250% 04/21/14 73 Ford Motor Cred 6.500% 03/20/15 72 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 75 General Motors 7.400% 09/01/25 69 General Motors 7.700% 04/15/16 73 General Motors 8.100% 06/15/24 72 General Motors 8.250% 07/15/23 72 General Motors 8.375% 07/15/33 74 General Motors 8.800% 03/01/21 73 Global Health SC 11.000% 05/01/08 2 GMAC 5.250% 01/15/14 72 GMAC 5.350% 01/15/14 74 GMAC 5.700% 06/15/13 74 GMAC 5.700% 10/15/13 74 GMAC 5.700% 12/15/13 75 GMAC 5.750% 01/15/14 74 GMAC 5.900% 01/15/19 73 GMAC 5.900% 02/15/19 70 GMAC 5.900% 10/15/19 72 GMAC 6.000% 02/15/19 73 GMAC 6.000% 02/15/19 73 GMAC 6.000% 02/15/19 73 GMAC 6.000% 03/15/19 70 GMAC 6.000% 03/15/19 73 GMAC 6.000% 03/15/19 73 GMAC 6.000% 03/15/19 74 GMAC 6.000% 03/15/19 74 GMAC 6.000% 04/15/19 69 GMAC 6.000% 09/15/19 70 GMAC 6.000% 09/15/19 73 GMAC 6.000% 12/15/13 74 GMAC 6.050% 08/15/19 72 GMAC 6.050% 08/15/19 72 GMAC 6.050% 10/15/19 72 GMAC 6.100% 09/15/19 74 GMAC 6.125% 10/15/19 74 GMAC 6.150% 08/15/19 73 GMAC 6.150% 09/15/19 74 GMAC 6.150% 10/15/19 73 GMAC 6.200% 04/15/19 72 GMAC 6.250% 01/15/19 74 GMAC 6.250% 04/15/19 71 GMAC 6.250% 05/15/19 74 GMAC 6.250% 07/15/19 75 GMAC 6.250% 12/15/19 74 GMAC 6.300% 08/15/19 74 GMAC 6.300% 08/15/19 74 GMAC 6.350% 07/15/19 71 GMAC 6.400% 11/15/19 75 GMAC 6.400% 12/15/18 74 GMAC 6.500% 01/15/20 74 GMAC 6.500% 02/15/20 75 GMAC 6.500% 06/15/18 75 GMAC 6.500% 11/15/18 74 GMAC 6.500% 12/15/18 74 GMAC 6.500% 12/15/18 74 GMAC 6.600% 05/15/18 75 GMAC 6.600% 06/15/19 71 GMAC 6.600% 06/15/19 74 GMAC 6.650% 02/15/20 74 GMAC 6.700% 06/15/19 74 GMAC 6.700% 08/15/16 74 GMAC 6.750% 03/15/20 72 GMAC 6.750% 10/15/18 72 GMAC 6.800% 10/15/18 73 GMAC 7.000% 06/15/22 74 GMAC 7.000% 11/15/24 73 Golden Books Pub 10.750% 12/31/04 0 Graftech Int'l 1.625% 01/15/24 69 Gulf Mobile Ohio 5.000% 12/01/56 74 Home Prod Intl 9.625% 05/15/08 74 Horizon Fin Corp 11.750% 05/08/09 0 Inland Fiber 9.625% 11/15/07 63 Insight Health 9.875% 11/01/11 55 Insilco Corp 12.000% 08/15/07 0 Iridium LLC/CAP 10.875% 07/15/05 25 Iridium LLC/CAP 11.250% 07/15/05 24 Iridium LLC/CAP 13.000% 07/15/05 25 Iridium LLC/CAP 14.000% 07/15/05 25 Isolagen Inc. 3.500% 11/01/24 57 Jordan Industries 10.375% 08/01/07 55 Kaiser Aluminum & Chem. 9.875% 02/15/02 52 Kaiser Aluminum & Chem. 10.875% 10/15/06 51 Kaiser Aluminum & Chem. 10.875% 10/15/06 52 Kaiser Aluminum & Chem. 12.750% 02/01/03 11 Kevco Inc 10.375% 12/01/07 0 Key Plastics 10.250% 03/15/07 0 Kmart Corp. 8.540% 01/02/15 16 Kmart Corp. 8.990% 07/05/10 12 Kmart Corp. 9.350% 01/02/20 7 Kmart Funding 8.800% 07/01/10 52 Kmart Funding 9.440% 07/01/18 37 Lehman Bros Hldg 11.000% 10/25/17 75 Liberty Media 3.750% 02/15/30 57 Liberty Media 4.000% 11/15/29 62 Lifecare Holding 9.250% 08/15/13 58 Macsaver Financl 7.400% 02/15/02 0 Macsaver Financl 7.600% 08/01/07 3 Merisant Co 9.500% 07/15/13 67 Mosler Inc 11.000% 04/15/03 0 Movie Gallery 11.000% 05/01/12 46 MSX Int'l Inc. 11.375% 01/15/08 69 Muzak LLC 9.875% 03/15/09 55 Natl Steel Corp. 8.375% 08/01/06 8 New Orl Grt N RR 5.000% 07/01/32 71 New World Pasta 9.250% 02/15/09 8 North Atl Trading 9.250% 03/01/12 68 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 Northwest Airlines 6.625% 05/15/23 45 Northwest Airlines 7.248% 01/02/12 13 Northwest Airlines 7.625% 11/15/23 44 Northwest Airlines 7.875% 03/15/08 47 Northwest Airlines 8.130% 02/01/14 62 Northwest Airlines 8.700% 03/15/07 45 Northwest Airlines 8.875% 06/01/06 45 Northwest Airlines 8.970% 01/02/15 37 Northwest Airlines 9.179% 04/01/10 26 Northwest Airlines 9.875% 03/15/07 46 Northwest Airlines 10.000% 02/01/09 45 Northwest Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc. 10.750% 03/01/14 73 Nutritional Src. 10.125% 08/01/09 60 NWA Trust 11.300% 12/21/12 69 Oakwood Homes 7.875% 03/01/04 8 Oakwood Homes 8.125% 03/01/09 15 Osu-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 10.750% 06/01/08 0 PCA LLC/PCA Fin 11.875% 08/01/09 20 Pegasus Satellite 9.625% 10/15/05 10 Pegasus Satellite 12.375% 08/01/06 10 Pegasus Satellite 12.500% 08/01/07 10 Piedmont Aviat 10.250% 01/15/49 0 Pixelworks Inc. 1.750% 05/15/24 70 Pliant-DFLT/06 13.000% 06/01/10 26 Pliant-DFLT/06 13.000% 06/01/10 30 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Pope & Talbot 8.375% 06/01/13 69 Pope & Talbot 8.375% 06/01/13 72 Pres Riverboat 13.000% 09/15/01 5 Primedex Health 11.500% 06/30/08 58 Primus Telecom 3.750% 09/15/10 40 Primus Telecom 8.000% 01/15/14 68 Primus Telecom 12.750% 10/15/09 74 Read-Rite Corp. 6.500% 09/01/04 13 Refco Finance 9.000% 08/01/12 52 Reliance Group Holdings 9.000% 11/15/00 18 Reliance Group Holdings 9.750% 11/15/03 0 Renco Metals Inc 11.500% 07/01/03 0 RJ Tower Corp. 12.000% 06/01/13 67 Safety-Kleen Crp 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 56 Scotia Pac Co 7.110% 01/20/14 75 Silverleaf Res 8.000% 04/01/10 35 Solectron Corp. 0.500% 02/15/34 75 Source Media Inc. 12.000% 11/01/04 0 Steel Heddle 10.625% 06/01/08 0 Steel Heddle 13.750% 06/01/09 0 Sterling Chem 11.250% 04/01/07 0 Summit Secs Inc 9.500% 09/15/05 0 Tekni-Plex Inc. 12.750% 06/15/10 57 Teligent Inc 11.500% 12/01/07 0 Thermadyne Holdings 12.500% 06/01/08 0 Tom's Foods Inc. 10.500% 11/01/04 5 Toys R Us 7.375% 10/15/18 74 Trans Mfg Oper 11.250% 05/01/09 65 Tribune Co 2.000% 05/15/29 72 Trism Inc 12.000% 02/15/05 0 Triton Pcs Inc. 8.750% 11/15/11 68 Triton Pcs Inc. 9.375% 02/01/11 68 Tropical SportsW 11.000% 06/15/08 10 Twin Labs Inc. 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 48 United Air Lines 7.371% 09/01/06 58 United Air Lines 7.762% 10/01/05 73 United Air Lines 7.870% 01/30/19 55 United Air Lines 9.350% 04/07/16 30 United Air Lines 10.020% 03/22/14 45 Univ Health Svcs 0.426% 06/23/20 57 US Air Inc. 10.250% 01/15/49 0 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.250% 01/15/49 8 US Air Inc. 10.700% 01/01/49 8 US Air Inc. 10.900% 01/01/49 3 US Air Inc. 10.900% 01/01/49 6 Venture Hldgs 12.000% 06/01/09 0 Wachovia Corp 13.000% 02/01/07 65 WCI Steel Inc. 10.000% 12/01/04 68 Werner Holdings 10.000% 11/15/07 23 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 6.000% 08/01/10 70 Williams Commun 10.875% 10/01/09 0 Winsloew Furniture 12.750% 08/15/07 15 Winstar Comm 12.750% 04/15/10 0 World Access Inc. 13.250% 01/15/08 5 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Terence Patrick F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M. Pinili, Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***